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Re: Investement in bond now.



name wrote:
What do people think about starting a bond (medium term) investment while interest rate is going up ?

Better plan on holding it to maturity. That however is generally the best thing with bond investments anyway.

A rising interest rate, means that the market valuation of your
bond will drop for some time.  This is fine if you don't need to
sell into the market, and are happy with the effective yield
when held to maturity.

Whether this a good idea depends a lot on the rest of your portfolio.
Buying a bonds now means you are getting an okay yield, but probably
means you are likely locking in a capital loss on maturity, inside
a sheltered plan (RRSP, RESP, RRIF) this is not a serious consideration,
but outside a plan you need some other equity type investment that is
likely to generate offsetting capital gains.




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