Strategies for Investing in a Rising Rate Environment

Accurately calling interest rate moves has proved to be a difficult, and futile, task for investors over the past few years as we have seen wild moves and really no sustained direction.  The only aspect of rates that can be accurately predicted is volatility. As we look forward, we know the Fed wants to raise rates, though the primary impetus to do so seems to be to have room to lower them should they need to later, rather than strong economic growth supporting the need to do so.  The data for the “data dependent” Fed doesn’t clearly support a rate increase, and after last week’s Fed meeting, we seem to be getting further and further away from an increase.  While we are certainly not under the belief that a rapid rise in rates is on the medium-term horizon, for the sake of argument, let’s assume that rates do rise materially from here.  What does that mean for the high yield market and the various “strategies” out there to deal with rising rates?  Click here to read our piece, “Strategies for Investing in a Rising Rate Environment.”

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