If a bond is doing poorly, maybe because the stock market is booming (typically, when the stock market is doing well, bonds are lagging, and vice versa), ask yourself what cost you can expect from hanging on to the bond until maturity. Compare that expense with what it will cost you to sell the bond. If interest rates rise substantially, say to 15%, and you’re hanging on to a bond paying 4%, you might well be better off selling the older issue and buying a new bond.
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