Show all

If interest rates decline, should I sell my bonds?

interest decline

interest decline

New York - Let's say you are holding 30-year Treasury bonds that mature in five years. The bonds pay 7 1/8 percent and trade at a premium due to the current low interest rate environment. Many investors are curious as to whether or not they should take the capital gain and invest the proceeds in new Treasuries. Here is our take.

If you are using the bonds to produce income - you probably should hold the bonds. If you sold the bonds and reinvested the proceeds in new bonds, your income level would decline to whatever the current interest rates are paying.

If you are using the bonds to produce capital gains and you believe interest rates will decline further - you may want to consider selling the bonds and buying bonds that mature longer than five years. This allows you to capture future additional capital gains that would result if interest rates decline.

If you're looking for help managing your bond investments, consider working with a FEE-ONLY financial adviser from the Our network of FEE-ONLY advisers can offer unbiased advice, personalized guidance and help you make informed decisions about your bond investments. Ask us any question or obtain a free consultation at  Alternatively,  visit 1800ADVISER.COM to browse biographies of individual FEE-ONLY advisers and choose one or more to connect with. 


About Us

Founded in 1998, The Independent Adviser Corporation has assisted thousands of individuals, families, and businesses. We are 100% independent and objective and offer free private consultations. Our company publishes free investment research and educational materials, and when personalized financial or legal advice is needed, we connect clients with a network of FEE-ONLY professionals. For more information, become a member or to schedule a free consultation, please visit our website at or 1800ADVISER.COM