Im speaking here stricly for an etf which holds a variety of 20+ year bonds, TLT for instance. If the fed raises rates, and therefore new issues 20yr bonds have higher yields, then wouldn't an etf holding 20yr bonds rise in value? Becuase the etf is just a aggregated value of all its holdings, many of them being bonds issued in the past 7 years which pay 3% at best.
Another factor is, if interest rates rise, then people will be running from stocks and placing their money in bonds (for the most part). So the price of treasuries on the secondary market would rise with the higher demand.
I know nothing about anything, its clear and obvious..i know. im just trying to get an answer here. So somebody please explain how high interest rates fucks bonds (which are about the most confusing things to understand on earth)
p.s. how do the staples do during rates rises?
Submitted May 17, 2015 at 06:00PM by fastneasyname http://ift.tt/1Hm6le2
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