Why do bond prices fall when interest rates rise?

Explanation of why bond prices fall when interest rates rise, and vice versa

#Bonds #Interest Rates #Investing

DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Tenon Financial LLC make any guarantees to its accuracy.

[slymzqn]

Thanks so much! Been trying to understand this concept for months as I see it referenced everywhere and I finally understand from your explanation

[frankxue]

You explained it very well even without the visual aids! Thanks ！

[HafezBd]

Even if bond yields are increasing while stock prices are decreasing, the markets are still skeptical whether the Federal Reserve will stick to its goal to raise interest rates until inflation is under control. While I'm still debating whether to sell my $401k worth of equities, what is the best way to profit from the present down market?

[kacolorado]

Is this another way to look at it?:

In a rising interest rate environment, new issues look more attractive to investors (because of a higher interest rate), therefore, existing issues will lose their value.

[JS-jhcy]

What about the reverse mortgage situation?

[Burgerurger]

Sharing this with some friends after this SVB woopsie-doodle

[mycommentpwnz]

I've always wondered why bonds/securities are priced like this. It seems like a backwards approach.
However, once you understand the bond market is a market like any other, meaning it is at the whims of supply & demand, it begins to make more sense.
When interest rates are high, it generally means people aren't buying bonds for any one of a plethora of factors.