Ndubuisi 'Andy' Egwim explains why bond prices rise when stocks fall. When investors panic and flee stocks, they buy bonds instead, pushing prices up. A 30-year bond you bought earlier becomes more valuable as demand increases.
But do you know that a lot of times when the value of stocks are tumbling down, when the price of stocks is tumbling down, when people are fleeing from the stock, do you know what starts going up in value? Do you know what starts becoming quite treasurable? People run to is it bonds, bonds, treasuries. Because when people flee from the stock market they go and pack their money in bonds and what do they do to bond? They start making the price of bonds to go up because more people want your bond. The bond you bought last year that you're planning to hold for 30 years is suddenly more valuable because of the amount of interest is paying. If interest rate goes up then more people want that bond. So you might even still sell that your bond at a higher price. I can just hold it till the end of the month until it comes to maturity. We're going to look at bonds at some point. Okay.
