AIF - Rates And Reality Series: Was The Great Bond Bull Market Just Plain Bull?
In this three-part series, Matt Tucker overturns some commonly held assumptions about the relationship between interest rates and bond returns. Here, he examines what 30 years of falling rates actually meant for bond investors.
One comment you often hear these days is how lucky bond market investors have been. Interest rates have been falling for decades, and this has led to a huge bull market for bonds. This is the conventional wisdom that everyone has embraced: falling interest rates are good for investors, and rising rates are bad.
The reasoning is straightforward bond math. If