The relationship between bond prices and interest rates can be confusing. Even some financial whizzes admit to struggling to understand why a bond’s price goes down when interest rates go up – and vice versa.
But knowing how the relationship works is crucial to building a sound nest egg. This video from the Khan Academy uses some simple math to make the relationship clear. Watch the video, and you’ll make better decisions on where to put your money.
Do you feel comfortable buying bonds? Let us know by commenting below or on our Facebook page.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.