What Higher Interest Rates Mean For Your Bond Portfolio

Nov 29, 2021

Welcome to a new week here on the Retirement Quick Tips podcast. I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $325 million in client assets. I’m a Chartered Retirement Planning Counselor, and I started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the podcast is: What Higher Interest Rates Mean For Your Bond Portfolio.

Interest rates have been quite low for quite a long time. In the 2008 financial crisis, the Federal Reserve slashed the Federal funds rate from around 5% to 0% over the course of several months. Since then, the federal funds rate has remained low, hovering around 1-2% until the Covid crisis when the Fed cut rates dramatically to zero. 

Now that we’re emerging from the Covid crisis, and many parts of the economy are returning to normal, the Fed has indicated it plans to keep rates low for now, but it seems increasingly likely that the Fed will need to act and start raising rates in 2022, especially if inflation figures continue on their current path. 

So this week on the podcast, I’ll talk about:

• Why Higher Interest Rates Are Actually Good For Bond Investors 
• Even though rates are expected to increase, they still could stay low for years to come, so I’ll talk about how to be patient and prudent if rates continue to stay low.
• Then I’ll talk about 3 bond investing strategies that work in a rising interest rate environment

I hope what I have to share with you this week will help you make smart and thoughtful decisions with your retirement. And while I am careful to not lead you astray, personal finance is not an exact science. There is no one-size-fits-all solution for everyone, so I encourage you to disregard anything I say that may not be helpful for you, and to consult your own financial, tax, and legal advisors regarding your own individual situation. 

That’s it for today. Come on back tomorrow where I’ll talk about why you want to embrace rising interest rates as a bond investor. 

Thanks for listening! My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance