16. How to use a Bond Calculator

Videos
Download Preston’s 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist

Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:

In this lesson, students learned how to apply the BuffettsBooks.com bond calculator. We learned that as interest rates increase, the value of a bond decreases. Similarly, when interest rates decrease, the value of a bond decreases.

When using the bond calculator, it becomes evident that the term of the security changes as it approaches the maturity. Since a premium or discount paid for a bond cannot be recuperated through coupon payments, short term bonds are less affected by changes in interest rates compared to long term bonds. This idea of changing interest rates can be taken advantage of by intelligent investors if they purchase high yielding long term bonds. In order to find a high yielding, long term bond, an investor can implement the ideas learned in lesson 3 of this unit.

Articles You May Like

Video platform Rumble plans to buy up to $20 million in bitcoin in new treasury strategy
Small Caps: Unexpected Outperformance Could Drive Gains in a Hurry
These economists say artificial intelligence can narrow U.S. deficits by improving health care
Want Unsurpassed Results in 2025? Follow Elon Musk’s Lead
The AI Stocks Poised to Dominate the Market by 2025