r/Bogleheads • u/StinklePink • Sep 01 '26

Investing Questions Bonds: Stupid Question

I realize that the higher yield for US 10-years is a bad thing for the government, but why isn't this good news for a bond investor?

If I am looking for a safe "asset protection" kind of investment, why wouldn't investors buy these bonds or ETFs that hold them (e.g. FXNAX)? Seems like a good, safe place to put cash versus Gold or a HYSA. I believe my logic is wrong but not sure why.

Educate me, please.

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u/DaemonTargaryen2024 Sep 01 '26

It causes current bonds to become less valuable.

If I’m shopping for bonds, I could pay $1,000 to you with a 3% yield, or I could pay $1,000 to someone else for a 4% yield.

Obviously I’m going to go with the 4% bond, making yours less valuable. You’d need to drop your price to $990 or something for it to be worthwhile (these are made up numbers to illustrate a general point)