Phil Cannella – Phillip Cannella News

Phil Cannella: “Are bonds risky?”

Alicia Munnell: “Bonds of course are risky, but they’re risky in a different way.  If you had a bond and you still had it, if you had a bond before the collapse and you still have it that means you probably have the old interest rates and you’re fine, and in point of fact your bond value would have gone up if you wanted to sell it today.  When that bond expires though, you will be exposed to new, low interest rates.”

Phil Cannella: “I got it.”

Hear more from the interview with Phil Cannella and Alicia Munnell on The Crash Proof Retirement Show®. Saturdays at 11am and Sundays at 1pm on Talk Radio 1210AM, WPHT!

Phil Cannella Interviews Alicia Munnell: Part 20

Phil Cannella: “Well isn’t it true the bond environment follows the interest rate environment?  So if interest rates go down the bond values go up and if interest rates go up?”

Alicia Munnell: “If interest rates go down bond prices go up. That only effects you if you’re going to sell your bond, but if you continue to hold it then what effects you is what is going to be the interest rate environment when that bond matures because, point in fact, if you had to sell your bond, you get the higher price because the bonds on the market have the lower return.”

Phil Cannella: “That’s exactly right.”

Hear more from the interview with Phil Cannella and Alicia Munnell on The Crash Proof Retirement Show®. Saturdays at 11am and Sundays at 1pm on Talk Radio 1210AM, WPHT!