Bonds are issued by governments and corporations when they want to raise money. By buying a bond, investor is giving the issuer a loan, and issuer agrees to pay the investor back the face value of the loan on a specific date, and to pay periodic interest as well.
A Thread 🧵on how bond yields impact stock market ?
Must read for beginners in #StockMarket.
(RT to maximize reach.)
#Bonds #BondYields #StockMarket #Investing
Bonds are issued by governments and corporations when they want to raise money. By buying a bond, investor is giving the issuer a loan, and issuer agrees to pay the investor back the face value of the loan on a specific date, and to pay periodic interest as well.
Bond yield, on the other hand, is the return that an investor gets on that bond or on a particular government security.
#Investing #StockMarket #Bonds
A fall/rise in interest rates in an economy pushes up/pulls down bond prices. However, bond yields fall/rise in this situation.
Rise in bond yields denotes higher interest rates in economy. This increases borrowing costs for companies & consumers. This ultimately reduces overall demand in economy & negatively impacts #StockMarket.
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