Moreover, as bond coupons fall, their duration, or their sensitivity to interest rates swings, goes up.
Buckley Jr. said one of his favorite pastimes was sitting at home clipping bond coupons.
You are getting paid very little and your bond coupons, unlike stock dividends, will not adjust over time to reflect rising prices.
But anyone investing in such bonds should try to do so in a tax shelter like an IRA or 401(k), as bond coupons are taxable as ordinary income.
You know, we just think they have much, much better fundamentals than in the US or the developed markets, and yet they have got coupons or bond yields that are substantially above rates that you can get in, say, the US, Europe, or Japan.
Bond investors have become choosier about sovereign credit risk, so some euro-area borrowers have had to stump up higher coupons for their recent bond issues.
Bond investments with longer maturities and lower coupons will be among the hardest hit.
With interest rates at paltry levels and seemingly destined to rise, bond owners confront the ugly possibility that any coupons they receive will be wiped out by capital losses.
It measures what the return on a bond is if it is held to maturity and all coupons are reinvested at the YTM rate.
Based on the money that has flowed into bond funds lately, apparently a lot of investors have rekindled that old flame for coupons.
But with coupons closer to 3.7% today, the same two-point rate increase cuts the bond's value by 28%.
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