Bond prices have an inverse relationship with interest rates. This means that when interest rates go up, bond prices go down, and when interest rates go down, bond prices go up. The reason for this is quite simple. If interest rates are falling, older bonds that offer higher interest rates become more valuable, so their prices rise. Similarly, if interest rates are rising, older bonds that offer lower interest rates become less valuable, so their prices fall. Given this relationship, the best time to buy bonds is when interest rates are falling. In a falling rate environment, bond prices tend to rise, generating extra gains for investors.