Protecting clients from rising interest rates

By Director of Business Development, Scott Jones on March 10, 2015

Given the strong economic growth indicators released over the past few months, it has become clear that the Federal Reserve will raise short-term interest rates this year.

If history is a guide, this action will eventually lead to increases in interest rates across the maturity spectrum.  Since bond prices decline when interest rates rise, financial advisors and their clients need to adjust the strategy in the non-equity (or “diversification”) portfolio to minimize losses.

Although diversification portfolios composed of US investment grade bonds have served clients well over the last 30+ years, we believe we have begun a period of secularly increasing interest rates.

The iSectors OPTIMAL DIVERSIFICATION PORTFOLIO FOR UPCOMING INTEREST RATE ENVIRONMENT paper presents:

  • Historical patterns in interest rates leading to the current trend
  • Macroeconomic activity supporting future rising interest rates
  • Recommendations for optimizing client portfolios in such an environment

Click here for the paper.

Financial advisors can contact Scott Jones at 1.800.869.5184 or [email protected] for further information or assistance.

 

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