| "The Securities and Exchange Commission has a basic reminder for investors enticed by rising interest rates on bonds: When rates climb, prices fall. THE Securities and Exchange Commission issues frequent bulletins about what it calls "investment frauds and scams" -- a frightening taxonomy of plots and stratagems aimed at separating investors from their money, but this problem isn't a new scam but a lack of knowledge about how bonds work, which can be dangerous in a time of rising interest rates. In its bulletin, the agency points out that investors need to understand that when rates rise, bond prices generally fall. This inverse relationship is a fact of life in the bond market. Like gravity in the physical world, it's constant, powerful and important." In America, financial literacy levels are generally very low. |
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