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Hedging Rising Interest Rates

By: ETFdb
I continue to get questions about how the Fed’s tapering of bond purchases, which is currently underway, will impact investors’ fixed income positions and how to best prepare a portfolio for rising interest rates. As I explained in a recent Blog post, we expect rates to rise gradually. There are several reasons behind this rationale, specifically: the Fed is gradually slowing down their bond buying program, and is expected to end it near the end of this year; the Fed has signaled that they likely won’t begin to raise short term interest rates until the middle of 2015; and overall the Fed has indicated that they want to provide a lot of transparency into their thinking on interest rates, which should allow for policy shifts to be incorporated more slowly into bond prices and yields. That being said, some investors are already thinking about how they want to position their portfolios […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
I continue to get questions about how the Fed’s tapering of bond purchases, which is currently underway, will impact investors’ fixed income positions and how to best prepare a portfolio for rising interest rates. As I explained in a recent Blog post, we expect rates to rise gradually. There are several reasons behind this rationale, specifically: the Fed is gradually slowing down their bond buying program, and is expected to end it near the end of this year; the Fed has signaled that they likely won’t begin to raise short term interest rates until the middle of 2015; and overall the Fed has indicated that they want to provide a lot of transparency into their thinking on interest rates, which should allow for policy shifts to be incorporated more slowly into bond prices and yields. That being said, some investors are already thinking about how they want to position their portfolios […]

Click here to read the original article on ETFdb.com.

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