You Can't Control Rising Interest Rates, but You Can Control What You Do About Them
What a wild ride interest rates have been on over the past year and a half! The federal funds rate has soared from its multi-decade low near nil early last year to a target rate of 5.33% as of last month.
Other interest rates like those on mortgages, bonds, money market funds, and credit cards, have grown similarly, but more dramatically.
Income investors have certainly seen the impact of rising rates, too. While higher rates translate into higher yields on new Income-generating investments, they also crimp the value of your current dividend-paying stocks and bonds. The bigger the stock's yield or the longer the bond's term, the greater the adverse impact. Some investors' portfolios are now nursing rather serious unrealized losses as a result.
Source Fool.com
