Tools & Resources▼
The days of historically low interest rates are coming to an end.
The Fed's decision to begin gradually nudging up short-term interest rates has investors facing three challenges: pursuing income in a still low-yield environment; protecting against rising rates; and finding opportunities as yields move up.
What can investors do?
Consider several strategies
Because each rising-rate period can vary, investors and their advisors should consider a broad range of income-generating asset classes. Here are six that have potential:
Shorter durations make them less sensitive to rate movements compared
to intermediate and long-term bonds.
Automatically adjust as interest rates change.
High income relative to other bonds may cushion the effects of rising rates.
Future growth is expected to outpace developed countries.
Potential to provide a consistent income stream and contribute to total return.
Typically less volatility than an all stocks portfolio; less interest-rate sensitivity
than an all-bonds portfolio.