Since the mid-1980s interest rates have been declining1 and have now remained low for the past few years. These low rates have made it challenging for many investors to generate the retirement income they need to reach their retirement goals. However, a recovering economy could suggest the possibility of rising interest rates by the Federal Reserve. [+] Read More

If you’ve been tracking your fixed income performance this year, you’re probably wondering what’s going on. Depending on your goals, a fixed income allocation should generate income, help preserve your principal, hopefully provide stability during more volatile times or provide a combination of all three. Recently, these benefits have been challenged by the exceptional volatility and trend in interest rates, which has resulted in less than desirable performance for many fixed income portfolios. Take this as an opportunity to have a financial advisor evaluate or re-evaluate your fixed income portfolio to help you ensure that it’s properly diversified and working for you and your goals. [+] Read More

In our recent post on interest rates, we reviewed Federal Reserve policy and explained how future Fed actions may cause interest rates to rise. Some fear that with the Fed gradually taking their “foot off the gas” by reducing the current quantitative easing program, the economy could feel some negative effects. But the question we ask is: Could gradually rising interest rates actually be a good thing for the economy and your portfolio? Here are four reasons it might. Reason 1: Rising Interest Rates as a Vote of Confidence In Wealth Manager Tom Wilson’s recent piece titled “Preparing Your Portfolio for Rising Interest Rates,” he mentions that the Fed’s reductions or elimination of quantitative easing would be a sign of an improving economy. This could reflect itself in rising stock prices, which could be a benefit to portfolios. [+] Read More

Interest rates are still at historically low levels, but recent statements about quantitative easing from Federal Reserve Chairman Ben Bernanke have put the prospect of rising interest rates front and center. Many investors are now asking - how do I prepare my portfolio for the possibility of rising interest rates? First, it’s important to understand that reducing or eliminating quantitative easing is a sign of an improving economy. Second, investors should look at how different fixed income sectors can be more or less susceptible to a rise in interest rates. And finally, investors should review their portfolios with their wealth manager, specifically the fixed income portfolio, and make adjustments as needed. [+] Read More