Is your bond portfolio ready for rising rates?
Abstract: Recent Federal Reserve decisions suggest the era of rock-bottom interest rates is over. This article explains how, when rates rise, a bond’s interest rate becomes less attractive to buyers in the marketplace. But it urges investors to remember that a bond’s total return consists not only of price performance, but also income payments, and suggests some new strategies that might reduce risk and improve returns. A sidebar explains why cash investments could become more appealing as rates rise.