How Bonds Affect the Stock Market
Bonds Affect the Stock market by competing with stocks for investors' money. As a result, when stocks go up in value, bonds go down. Stocks do well when economy is booming and when economy slows, investors prefer bonds with regular interest payments guaranteed by bonds. Sometimes, both stocks and bonds can up in value at the same time when there is too much money or liquidity, chasing too few investments. There are times when stocks and bonds both fall. That is when investors are in a panic and selling everything. During those times, glod prices often rise.