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Rising Interest Rates: Good or Bad Time to Own Bonds?- Episode 113

A couple of years ago, we asked the question: why would you own bonds when they (were) paying so little interest?  Many others wondered the same thing, turning to the stock market to help potentially bolster their overall rate of return.

Interest rates have risen dramatically in 2022, which changes the question just a bit: is it good to own bonds during a period of rising interest rates?  As rates go up, the value of your bonds goes down.  Wouldn’t it seem like it’s better to own bonds when interest rates are falling?  And what about bond funds?

It’s a complicated world out there, but podcast host Johnny Dean and his guest, Rick “The Professor” Plum, CFP® provide you with some answers on this week’s episode of Managing Your Financial Future!

Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

No client or prospective client should assume that this information, or any component thereof, serves as the receipt of, or a substitute for, personalized advice from Lucia Capital Group or from any other investment professional.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

It is important to keep in mind that investments in fixed income products are subject to liquidity (or market) risk, interest rate risk (bonds ordinarily decline in price when interest rates rise and rise in price when interest rates fall), financial (or credit) risk, inflation (or purchasing power) risk and special tax liabilities. Interest may be subject to the alternative minimum tax.

Before investing, carefully consider a mutual fund’s investment objectives, risks, charges, and expenses. To obtain a prospectus or summary prospectus, which contains this and other information, call your financial advisor. Read the prospectus carefully before investing.

Rick Plum is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the name Lucia Capital Group, a separate entity from LPL Financial.

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