All of this (fearing bond price declines because
of interest rate increases) only matters if the mutual fund plans to sell bonds before maturity.
Such opposition led many to believe that the government would eventually limit
interest rate increases on student loans for this upcoming academic year.
While REIT weakness when rates rise might be true in theory, history has shown that it is really only a problem
when interest rates increase quickly over a limited period.
76 % believe there will be
more interest rate increases this year, and 71 % go as far as to agree «the era of affordable mortgages are coming to an end».
Where small investors get hurt is by purchasing hundreds of thousands of dollars in bonds and then
seeing interest rates increase substantially in a short period of time.
A noteworthy point is that buyer demand remains so strong that I believe it will continue for a considerable period, maybe two to three years, notwithstanding
potential interest rate increases.
No matter the cause of interest rate movements, the impact on the bond investor is the same: Rising interest rates reduce existing bond values and
falling interest rates increase existing bond values.
This could be an option for you if you want to put away some money for three years, but want to benefit if
interest rates increase month over month.
Although higher
interest rates increase pricing, one thing to consider is how the funds you would use to purchase an income annuity are currently invested.
Given
interest rate increases bite with a lag, any central bank that is serious about keeping a lid on price increases must stay ahead of the curve.
If both the predictions of home price and
interest rate increases become reality, families would wind up paying considerably more for their next home.
Phrases with «interest rate increases»