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Up Or Down, Today’S Big Worry Is Interest Rates

Saturday, June 22, 2013 - 2:12 PM
From Scott Burns' blog at AssetBuilder: 
Q. I believe I understand the effect of interest rates on bonds.  But two questions come to mind.  First, if you own individual bonds would you be better off keeping the bonds to maturity and getting the maturity value of the bonds, but losing out on higher rates; or should you sell and reinvest at some point in higher-interest-rate bonds?  Second, does this change with bond mutual funds – do fund managers hold bonds to maturity, or do they generally sell and reinvest when interest rates are going up?

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