[Workaccount2]

You're forgetting that you are stuck in that position to maturity though.

So while you might not feel like you are not going to take a loss, you are also chained to a position that will not make money either.

While everyone else is out making 1%, you are stuck with 0%. If you could wave a wand and get out of your bond with no loss, you would pick up a 1% and hold that instead. It would almost certainly be better to just eat the loss, and re-invest that money into something else, and come out ahead after 10 years.

Dollars in, dollars out isn't the only factor here. Bonds give this illusion that loss isn't happening because you can wait to get your money back. But a little introspection reveals that the loss is actually just hidden in the waiting is a itself.

[balderdash]

I’m not disagreeing with that - my point is that you’re assuming your liability/discount rate moves exactly in tandem with the move in your long dated asset. (In the example I gave above it only increases by 10%, if it moved 100% that you are absolutely impaired).