First off its interesting to me that so many articles worry about the impact of a rise in interest rates on the bond market but seem to ignore it with regards to its impact on stock prices.
Thus the WSJ article starts out as follows:
- In establishing a bond portfolio it is easier to pinpoint the risk factors and potential risk return of alternative scenarios. While it may not be possible to predict when interest rates will change it is relatively straightforward to predict how various types of bonds will react to changes in interest rates.
- Don't forget the total return: many articles on bonds focus solely on price changes ignoring the total return which is a product of price changes and interest earned.