The financial crisis in 2007 and 2008 may have sent investors fleeing from shares, but it’s been fantastic for bonds. Not only have they benefited from frightened investors looking for safety, they’ve also been helped by central banks across the globe, which have driven interest rates lower and printed money to buy their own governments’ bonds (which is known as quantitative easing, or QE).
How do bonds work?
Why have falling interest rates been good for bonds? Well, bond prices work like seesaws. When one end is up (prices), the other end (interest rates) is down, and [...]
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