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It is more important to know what is falling and what is rising. By knowing both of those this things you can take action and avoid severe financial lost.Bond markets also do not have safety features which help avoid large sell offs in the marker. This is because the action of the bond market is extremely sharp and far more volatile than the the stock market. There is nothing worse then being a bond holder in a decreasing market. Bond statements can make your stomach turn when you realize, in text, that you are loosing money by the second.There are also other reasons that bond prices decrease. The price per share of the stock and mutual fund companies do fall. This is because a great deal of their profits from from the trading of bonds. Many insurances companies invest a good bit of their capital in bonds which is also affects as the prices for bonds decreases.

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Individual bonds are influenced by two main components. These components are credit risk and interest rate risk. Bonds are held by company's and governments. When their credit rating is lowered their bond prices will significantly decrease. This is because there is more risk to the company that issued the bond will default. Usually this does not influence the whole bond market. However, when this situation is happening often and to a number of companies it would cause the current decline in bonds.


 


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