Nyakera Enlightens us on Trading on Bonds
KEMSA Chairperson The Hon Irungu Nyakera is kind enough to share with us nuggets of wisdom pertaining trading in bonds.
“What you need to know about bonds now that they are the hottest assets for investors:
Bond prices are inversely related to bond yields.
When interest rates rise, bond prices fall because investors can get a higher yield on new bonds and are hence willing to pay less for older bonds with lower interest rates.
When interest rates fall, bond prices rise because investors get a lower yield on new bonds and are therefore willing to pay more for older bonds with higher interest rates.
Advise: invest in government bonds today, rates are at an all time high.”
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