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Should you worry about your bubble bonds?
OFFICES OF EDWARD JONES
These days, many investors are focused on the volatility of the stock
market. But if you own bonds, you're probably looking at a different
picture. In fact, bond prices have risen so much that there's now talk of a
possible "bubble." If this happens ‹ that is, if bond prices reach
unsustainable levels and then drop sharply ‹ how should you respond?
Before we consider the likelihood of a potential bubble, let's look at just
why bond prices have risen so much. The chief cause is falling interest
rates. When market interest rates decline, the price on existing bonds ‹
which may carry higher rates ‹ will rise. That's because investors, seeking
higher...
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