Waching daily Nov 29 2017

You always see in the press that when there's interest rate rises or talk of

inflation it's going to be bad for bonds but no one seems to explain to you why

that is. Using this chart again from a previous video bonds offer a fixed

income typically this is fixed the agreed amount of interest you get paid

each year. Of course if you think about that if you compare that to the interest

rate on the Bank of England then this return is relative. If interest rates go

up then this interest looks comparatively worse so therefore people

don't want bonds and therefore they will start to sell them. Equally inflation

means that the Bank of England will tend to increase rates so therefore you get the

same effect again. So generally speaking bonds don't perform well in an interest

rate rising environment and equities tender fare better.

For more infomation >> Why is a rise in interests rates and inflation bad for bonds? | #WeNeedToTalkAboutMoney 072 - Duration: 0:48.

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