Wednesday, November 9, 2016

When bond yields go up, the value of bonds go down

If you own bond mutual funds, you may want to figure out how much at risk you are of losing a good chunk of money if interest rates rise further.

If you buy a $10,000 FDIC insured CD, you get your money back and the interest paid.

If you own $10,000 worth of a bond mutual fund, you have no guarantees of return of principle or a guaranteed interest rate.