Demand For Bonds Falls In Massachusetts
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A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
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Bonds have an inverse relationship to interest rates. When interest rates rise, bond prices usually fall, and vice-versa.How can I buy Commonwealth of Massachusetts Bonds? Learn about the relationship between bond prices and interest rates. If bonds will become more liquid in nature, more investors will be attracted to invest in bonds and so on the demand for bonds will increase. Procyclical. Recession. When income and wealth are falling, the demand for bonds falls, and the demand curve shifts to the left. This piece takes a closer look at how we, at Breckinridge, think about this everevolving process of building state preference municipal bond portfolios.
