@roxana.maddahi: Why do stocks go down when bond yields go up? In case anyone cares…here’s why stocks go down when bond yields go up. Stocks are pieces of ownership in a company. When the company does well prices go up and when the company is not doing well the price of each share goes down. Bonds are loans to companies or governments, and the bondholder gets paid interest. Even if the company does well, as a lender you won’t get paid more or less, you just get the interest that you agreed to when you made the loan. Lately, bonds have had historically high yields because the cost to borrow is high ; the rates are so high that they are competing with the stock market, which doesnt typically happen. As bond yields go higher, it creates competition for stocks. Investors are thinking, if I can invest with almost no risk at all at 5% in bonds, why should I invest in stocks and take the downside risk? #stockmarket #dailystockmarket #dailystockmarketrecap #stocks #investing101 #investingtips #financialfreedom #finance101 #financialliteracy

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2024-06-04 22:01:09

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