1087: [Part 2] Stocks - Part XII: Bonds by JL Collins on Everything You Need To Know About Bond Investments

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🗓️ 1 March 2020

⏱️ 11 minutes

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Summary

JL Collins of JLCollinsNH.com shares his thoughts on bonds. This is part 2 of 2. Episode 1087: [Part 2] Stocks - Part XII: Bonds by JL Collins on Everything You Need To Know About Bond Investments Mr. Collins is a senior executive with extensive P&L experience and a proven track record of growing revenue and profitability, integrating acquisitions, launching new products, developing and implementing business plans, creating powerful marketing strategies, building strong customer relationships and building effective teams. He is experienced in a broad range of markets including technology, automotive, investments, design engineering, electronics manufacturing, construction, horticulture and energy. Mr. Collins is also an accomplished consultant, author and speaker. He is retired, but continues to write on his blog. The original posts are located here: https://jlcollinsnh.com/2012/10/01/stocks-part-xii-bonds-and-a-bit-on-reits/ Please Rate & Review the Show! Visit Me Online at OLDPodcast.com and in The O.L.D. Facebook Group Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is optimal finance daily episode 1087 the second half of stocks part 12
0:06.0	bonds by J.L. Collins of J.L Collins n.com and I am your host and narrator of the show. My name is Dan and I'm here every single day reading to you from some of the best personal finance blogs on the planet.
0:19.0	And this post today is actually a continuation from yesterday, so if you are just picking this show up for the first time, it would be best to listen to yesterday's episode first.
0:28.0	But if you are all caught up, let's hear part two as we continue optimizing your life.
0:38.0	The second half of stocks, part 12,
0:41.0	Bonds by J.L. Collins of J.L.N.H.com
0:46.0	Info Stage 5.
0:49.0	Interest rate risk is the second risk factor associated with bonds, and it is tied to the term of the bond.
0:55.0	This risk only comes into play if you decide to sell your bond before the maturity date at the end of the term.
1:01.0	Here's why.
1:02.0	When you decide to sell your bond you offer it to
1:04.6	buyers on what is called the secondary market. Using our previous example,
1:09.1	these buyers might offer more than the 10K you paid or less.
1:13.2	It depends on how interest rates have changed since your purchase.
1:16.1	If rates have gone up, the value of your bond will have gone down.
1:19.4	If rates have gone down, the value of your bond
1:21.6	will have risen.
1:22.6	Confusing, no?
1:24.0	Look at it this way.
1:25.3	You decide to sell your bond from our example.
1:27.9	You paid $10,000 and are earning 10% or $1,000 per year.
1:33.0	Now, let's say interest rates have risen to 15%
	...

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