<prompt> Human: I have a 401k through my company, and it lets me invest through mutual funds. One of the funds that I invest in is a bond market fund. Ive noticed that its value tends to go down when the market is up, and its value tends to go up when the market is down. Im sure that this is expected because my savings plan suggests a mix of stock and bond funds. But why?  <response>: Every day the government auctions off new bonds. The interest rate they pay, is determined by investor interest in them. If investors are not as interested in buying bonds because they rather buy stocks or other investments or if they feel they are too risky for the interest they pay see greek bonds right now then the government raises the interest rate to make them more attractive this in turn lowers the prices of older bonds with a lower interest rate. 