When should you sell a bond?

That entirely depends upon the reason you are selling and what you will do with the proceeds once the sale is complete. First, if you know for a fact that you will need cash for expenses in the short term, up to 15 months or so, then selling enough of the bond to pay those expenses should be done immediately. You do not want to be exposed to the risk of any sort, with assets you need for known expenses.

Second, if you own a bond as part of an investment portfolio, then selling the bond would depend on a range of factors. The interest rate, the yield to maturity, the duration, etc. To make this simple for you, if you are selling because you think interest rates will be going higher (your bond losing value) then selling the bonds with the furthest maturity makes the most sense.

Lastly, if you see large inflation coming, then selling bonds before, would be quite prudent and allocate the proceeds towards an investment or asset that combats inflation (think stocks, real estate).

I’ll be happy to guide you to the exact right thing to do if you provide the reason you are interested in selling and the bond information.

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