Can You Lose Money If You Sell Treasuries Early?

In this video, you will learn if there is a risk of a loss of principal if a startup has to liquidate its Treasury bonds early.

00:00 Introduction
00:10 Is there a risk of a loss of principal if a startup has to liquidate its Treasury bonds early?
01:00 What happens if you need to sell those Treasury bonds early
01:44 What happens if you don't have to sell those bonds and you can just hold them to maturity
01:53 How do you earn interest when you buy Treasury bonds?
02:43 Conclusion

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Additional Resources

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#treasury #bonds #cashmanagement

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[tvm]

Great segment and I’m surprised that this is not more popular than it is.
One suggestion, you could give specific examples of how much loss one would incur due to premature selling.

[scottorn]

The selling a bond at a discount hits harder now, right?

[arthowardmedia]

The risk of loss increases with the length to maturity, right? Like Silicon Valley Bank was holding lots of long-term bonds when 10 year and up interest rates jumped. At the same time, there was a run on the bank and they had too many long term bonds so they had to cash people out at a loss. Bills and notes (two year and less maturities) are much safer, especially now with the inverted yield curve. Am I right (somewhat new to this)?

[MatthewFenty]

You filmed this before SVB? How ironic..