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Why It’s a Mistake to Cash Out of Bonds When Rates Rise

By Advisor Perspectives
Wealth Management

Bond investors are clearly worried about rising rates in today’s environment. Many are protecting themselves by moving to very short-term investments, or even cash. But is their “safe” choice putting them at risk?

The View Gets Better Up High

We get it. It seems intuitive that if interest rates are rising, bond prices will fall, so you should put your money someplace else. At least for now. The problem is, what’s intuitive isn’t always correct. In fact, investors who put their money into cash or similar strategies at this point in the rate cycle will find themselves quickly underperforming those who stuck to their bond strategy.

Read more at Advisor Perspectives.

Photo: Maeka Alexis

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