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By:
OMC Financial Services
Posted On:
4/24/2018 12:00 PM
As an investor are you prepared for higher interest rates?
Some reasons Interest rates rise:
- Inflation
- Growing Economy
- Demand/Supply
Bond Investors should evaluate their portfolio for:
- Length of bond until maturity
- Credit quality of the bonds held
- Type of bond; government bonds may be guaranteed but they are still affected by rising rates
Stock Investors should evaluate their holdings for:
- Stocks that are interest rate sensitive and may be negatively impacted
- Income stocks versus growth ones. Growth stocks may be more vulnerable in a rising rate environment
- Diversification
- Reducing their stock holding over time as non-stock alternative investments become more attractive