Imagine if you could pick only stocks that would go up the most.
Well, as far as I know, there is no sure way to do that with stocks, but there is a way to do that with bonds.
This video will show you how, and it will show real examples of how this works and how much you can potentially profit, and how it can even be better than the stock market.
This video will also show the best way to combine investments in bonds with investments in stocks.

Table of Contents
00:00 Introduction
00:24 Bond Prices
01:41 Duration
06:30 Convexity
07:29 Investments
10:40 Wrap-Up

Links
Bond Prices and Yields, Present Value and Future Value

How to Maximize Bond Profits

Duration and Convexity, with Illustrations and Formulas

VGLT – Vanguard Long-Term Treasury ETF | Vanguard Advisors

EDV – Vanguard Extended Duration Treasury ETF | Vanguard Advisors
Bond Yields: Nominal and Current Yield, Yield to Maturity (YTM) with Formulas and Examples

Bond Pricing and Accrued Interest, Illustrated with Examples
Interest Rate Risk of Bonds; Full-Valuation Approach (aka Scenario Analysis)

Bond Ratings and Credit Risk; Nationally Recognized Statistical Rating Organizations (NRSRO)

Bond Indentures (aka Trust Indenture, Deed of Trust)

Volatility of Bond Prices in the Secondary Market

Covered Topics
Bond Duration: Finding Bonds with the Greatest Potential for Capital Gains
5 Primary Factors Affecting Bond Prices
Bond Prices Move Inversely to Interest Rates
Learn More About Bond Prices, Yields, and Present Value
Measuring Interest Rate Risk
Full-Valuation Approach (aka Scenario Analysis)
Duration Provides an Easier and Faster Way to Calculate Interest Rate Risk
Duration Depends on Interest Rates and Cash Flow
Duration Measures of Sensitivity of Bond Prices to Interest Rates
Requirements for Using Duration
Sometimes, Duration Must Be Estimated
Bond Price / Yield Curve
Duration
Macaulay Duration Formula
Example: Calculating Macaulay Duration
Modified Duration
Calculating the New Price with Duration
Duration and Modified Duration Formulas for Bonds using Microsoft Excel
Convexity
Convexity of Bond-Yield Curve
Modified Duration and Convexity
Convexity Formula
Investments
How to Find Bonds for the Greatest Potential for Capital Gains
Never Buy Bonds When Interest Rates Are Expected to Rise
VGLT and EDV
Comparing Vanguard Treasury ETFs
EDV vs VGLT
EDV vs VGLT vs S&P 500
Federal Funds Rate
Avoid Credit Risk!…(read more)

LEARN MORE ABOUT: Treasury Inflation Protected Securities

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Bond Duration: Find Bonds with the Greatest Potential for Capital Gains

Investors often seek capital gains in their portfolios to maximize returns. While stocks are commonly associated with capital gains, bonds can also provide an opportunity for investors to achieve this goal. Understanding bond duration is essential in finding bonds with the greatest potential for capital gains.

Bond duration, a metric used in fixed-income investments, measures the sensitivity of a bond’s price to changes in interest rates. It helps investors determine how a bond’s value will change when the interest rate fluctuates. By knowing the bond duration, investors can identify bonds that offer potential capital gains when interest rates decline.

When interest rates fall, bond prices tend to rise, and vice versa. Long-term bonds usually have higher durations, meaning their prices will be more sensitive to interest rate changes compared to short-term bonds with lower durations. Consequently, long-term bonds have a higher potential for capital gains when interest rates decrease.

For example, consider a 10-year bond with a duration of 8 years and a 2% yield. If interest rates decrease by 1%, the bond’s price will increase by approximately 8%. On the other hand, a 2-year bond with a duration of 2 years and the same 2% yield will only have a price increase of around 2% for the same interest rate decrease.

To identify bonds with the greatest potential for capital gains, investors should consider several factors:

1. Analyzing interest rate trends: Investors should monitor the direction of interest rates and forecast potential changes. If interest rates are expected to decline, bonds with higher durations become more attractive.

2. Assessing yield levels: Bonds with higher yields generally have longer durations. By comparing yields, investors can estimate potential capital gains. It is essential to weigh the potential gains against any potential risks associated with higher yields.

3. Diversifying bond holdings: Holding bonds with different durations can help investors balance their capital gains potential and minimize risk. By having a diversified bond portfolio, investors are better poised to capture opportunities across different interest rate scenarios.

4. Researching credit ratings: Bonds issued by entities with higher credit ratings often have lower yields due to their lower risk. While these bonds may not offer substantial capital gains, they provide steady income. Investors should weigh the potential for capital gains against the associated risks.

5. Seeking professional advice: Bond investing can be complex, especially in identifying bonds with the highest potential for capital gains. Seeking advice from experienced financial professionals can help investors make informed decisions aligned with their investment goals and risk tolerance.

It is important to note that while bond duration helps identify bonds with potential capital gains during declining interest rate environments, it does not guarantee gains or shield investors from potential losses. Bond prices are influenced by various factors, including economic conditions, inflation expectations, and market sentiment.

In conclusion, understanding bond duration is crucial for investors exploring fixed-income investments. By analyzing interest rate trends, assessing yield levels, diversifying bond holdings, researching credit ratings, and seeking professional advice, investors can identify bonds with the greatest potential for capital gains. Careful analysis and risk management are essential in achieving investment goals and maximizing returns in bond markets.