: When new bonds are issued with higher interest rates, existing bonds with lower rates become less attractive, forcing their market price down.
The relationship between interest rates and bond prices is —much like a seesaw. should i buy bonds when interest rates are rising
: Investors can reinvest interest payments and maturing principal into new bonds at these higher prevailing rates, boosting the portfolio's long-term growth potential. : When new bonds are issued with higher
Despite the immediate price drop, several factors make bonds attractive in a rising rate environment: Despite the immediate price drop, several factors make
: Bonds continue to act as a "ballast" against stock market volatility, providing predictable cash flow even when their market value fluctuates.
: Buying during a rate hike allows you to purchase quality debt at a discount, which can lead to capital appreciation if rates eventually stabilize or fall. Strategic Approaches to Mitigate Risk Bonds 102: Rising Interest Rates may Benefit Bonds - PIMCO
: For new buyers, rising rates are a "buy" signal because they can lock in higher coupon payments than were available previously. Why Buying Might Make Sense