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Risks of Bonds When Interest Rates Rise

Sunday, April 25, 2010 - 6:57 AM
If inflation forces interest rates higher, bonds will suffer. This Arizona Republic article has a good review of these risks and provides this general rule of thumb regarding how interest rates affect bonds of different maturities:
If the general level of interest rates rose by a full percentage point, two-year Treasury bonds would lose about 2 percent of their principal, 10-year Treasuries would drop nearly 8 percent and 30-year Treasuries would tumble about 14 percent, reports fund-company T. Rowe Price.
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Ken TuminKen Tumin5,442 posts since
Nov 29, 2009
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