Why Bonds Are Going Down

The value of bonds is decreasing, and as an investor it's easy to get worried about it.

Watch Mike explain why bonds are down, and what you can do about it!
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00:01:30:21 - 00:01:54:29
Mike
What the Fed said, the Fed said we're going to start stepping up interest rates over the next year. Like, in fact, they said we're going to increase rates seven times that seven times. They want to move interest rates up because you know, inflation and all that other stuff. Well, let's think about it. Wait a minute now, going back to our little teeter totter here, right?

00:01:55:08 - 00:02:29:16
Mike
Here's our little teeter totter. You can tell I'm not the world's greatest artist, but if we've got our bond values over here and our interest rates over here, if interest rates are now saying, oh, we're going to now start going up, what's that mean for our bond values? They're going to start going down. And in fact, as I'm recording this here in the beginning of May, I think we've seen like most bond bonds, it's not uncommon for us to see bond funds are down 10% this year.

00:02:29:23 - 00:02:46:04
Mike
Why? Because interest rates have been moving up, which means bond values moved down. So that's why your bonds are losing money. Right. So that's number one. Now, the second part of the question is, Mike, we've got to get out of those bonds. By the way, I've been telling people for the last couple of years, you should have been getting out of bonds.