Are you ready for rising rates?
- Unlike previous interest-rate run-ups that subsequently retraced their ground over the past several years, the latest increases in longer rates appear likely to continue in fits and starts into 2014.
- Investors appear ready to move away from bonds and to equity and balanced strategies as a way to achieve potential income and reduced volatility in this current rate environment.
- Among fixed-income products, government issues tend to be the most sensitive to changes in rates while credit-oriented products such as corporate bonds are more closely linked to corporate performance and thus tend to be somewhat less sensitive to changes in rates.
- Because of the Fed’s commitment to maintaining the target funds rate at a 0-0.25% range even as it begins to dial down quantitative easing, short-term rates are less likely to move up in tandem with longer rates.
Click for the complete white paper