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This just in: Bonds are terrible investments. 30 year coupon-only bond has not increased in value in 30 years* *Not including the coupon payments
by tuna-piano 10y ago
This just in: Bonds are terrible investments. 30 year coupon-only bond has not increased in value in 30 years*
*Not including the coupon payments
- MagnumOpus 10y agoI get your point, but a pedantic remark: The price of 30 year coupon-only bonds have increased by 30%+ in the last three years alone, because a constant coupon stream becomes more valuable if interest rates are lower. (The parallel to a rental real-estate investment is obvious.)
- tuna-piano 10y agoI understand that point, but a real question. If you buy a 30 year coupon paying bond at $1 with a 5% yearly payment, won't it be a $1 bond in $30 years, regardless of whether it is $1.05 at year 28?