If interest rates decrease, it is true that new bonds will always offer higher returns than existing bonds, making the existing bonds less valuable.

When interest rates decrease, new bonds are issued with lower interest rates than existing bonds, which can make the existing bonds more valuable. This is because existing bonds typically have higher interest payments, making them more attractive to investors. If you own a bond that pays 5% interest and new bonds are only paying 3%, your bond is worth more because it gives a better return. However, if interest rates change, the market value of existing bonds can fluctuate, but it's not always guaranteed that new bonds will always offer higher returns. For example, if a bond you hold pays $50 a year in interest while new bonds pay only $30, your bond is more valuable despite the drop in overall interest rates.