December 29, 2006, Newsletter Issue #47: Trading Bonds
Tip of the Week
Trading individual bonds is not a beginner bond investing strategy. Still, a fundamental knowledge of bond trading can be useful.
If a bond is bought before long-term interest rates fall, it can be sold for a profit because it is worth more in interest than the bonds being sold at the lower rate. Conversely, if a bond is bought right before long-term interest rates rise dramatically and then sold, it will be sold for a loss. Even though selling a lower-yield bond could lose money in the short term, a seller needs to take into consideration how much interest can be made by channeling the money from the sale into a higher-yield bond. Buying and selling fees must always be included in the cost/benefit analysis.
About LifeTips
Now one of the top on-line publishers in the world, LifeTips offers tips to millions of monthly visitors. Our mission mission is to make your life smarter, better, faster and wiser. Expert writers earn dough for what they know. And exclusive sponsors in each niche topic help us make-it-all happen.
| Guru Spotlight |
| Byron White |
