Fixed Income

Bonds in a Rising Interest Rate Environment

March 7, 2019
Including bonds in your investment mix makes sense even when interest rates may be rising.

Key Points

  • Bonds’ interest component, a key aspect of total return, can help cushion price declines resulting from increasing interest rates.
  • Bonds can dampen the overall volatility of a stock-heavy portfolio because bond prices usually fluctuate less than stocks.
  • Diversification is as important for your bond portfolio as it is for your stock holdings.

Of course, diversification cannot assure a profit or protect against loss in a declining market. Past performance cannot guarantee future results.

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