Thoughtful Money with Adam Taggart · Sunday, September 27, 2026
Steven Bavaria explains the short-term impact of rising interest rates on bond prices, stating that they decrease. However, he emphasizes that for long-term investors, this price drop is temporary as bonds mature and are reinvested at higher rates. Bavaria highlights that approximately 20% of high-yield bonds in his portfolio reprice annually, leading to a higher income stream over time.
“And as the, as the bonds inside those funds collect at 100%, you know, they're going to get 100% back, no matter what yield, you know, in the interim, you know, between the, you know, when the interest rate market changes, is what I'm saying.”
“So at the end of, if I've got a portfolio with high yield bonds in it, which would only be a portion of my portfolio to begin with, about 20% of those bonds are probably repricing every year, you're collecting 100%, repricing at the higher rate, and meanwhile, until you collect your 100%, you're collecting the rate that was, you know, that you expected to get when you, when you or the fund that owns the bond bought the bond.”