While we can set up similar reinvestment program for bonds,
the swings in bond prices are not as significant due to the fact that bonds offer greater investment security.
Not exact matches
Global
bonds went on a wild rollercoaster ride last week, with the
price swings being particularly abrupt
in the U.S. and German markets, which have long been viewed as the safest and most liquid
in the world.
So back when the 2008 - 2009 financial crisis was
in full
swing, I bought some GM
bonds at depressed
prices.
The longer the maturity of the
bond, the bigger the
swing in prices.
Mild movements
in interest rates will often have a minimal effect on the
price of
bonds whereas abrupt
swings in interest rates, market sentiment or investor fears, as we've observed
in markets recently, can change the valuations of
bonds dramatically over a short period of time.
With today's stock and
bond markets overrun by insiders and the volume of options, futures and other derivatives dwarfing actual investment
in good companies while driving wild
swings in their
prices what is a traditional value investor to do?
Stresses
in the repo market are amplifying
price swings in government
bonds and related debt markets at a time when many investors are reshuffling their portfolios around new interest - rate expectations, following a period of low volatility, traders and analysts...
While
bond ETF
prices have
swung, reflecting the tough conditions
in the
bond market, they have become an important tool that allows investors to observe market movements
in real - time and, to transact, even when the
bond market is stressed.