Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Ben Carlson: The Bright Side Of Rising Interest Rates
"If you have a time horizon of 5 years or longer, you should actually hope for a rising rate environment. You’ll be better off for it in the end."
I think that would depend a lot on what kinds of bonds you own right now. If you own bonds with a relatively short maturities, rising rates could provide an opportunity to reinvest for greater investment income. If your bonds have very long term maturities, rising rates could mean (a) waiting a very long time to reinvest at higher interest rates, and/or (b) having to sell the long term bonds at a loss in order to reinvest at higher interest rates.
Comments
I think that would depend a lot on what kinds of bonds you own right now. If you own bonds with a relatively short maturities, rising rates could provide an opportunity to reinvest for greater investment income. If your bonds have very long term maturities, rising rates could mean (a) waiting a very long time to reinvest at higher interest rates, and/or (b) having to sell the long term bonds at a loss in order to reinvest at higher interest rates.
Nick de Peyster
http://undervaluedstocks.info/