Find options for investing in bank loans, often known as floating rate loans, which may provide high income and help offset the risk of rising interest rates.
Compared to other high yield investments, bank loans may be less risky because they are secured, or collateralized, by the borrower’s assets. That means they have top priority claim if the company were forced into bankruptcy. Bank loans are also variable-rate in nature, which means the coupon rate changes based on market interest rates. This may help offset the risk of rising interest rates while exhibiting less price fluctuation than comparable fixed rate investments.
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The positive side of higher rates
Bond yields have seen a surprising increase as a result of real interest rates, which could mean both good and bad news for other asset types.
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Bolster your portfolio with funds that invest in US government backed bonds—widely considered the safest, lowest-risk securities available.
Munis in mind
Take a look at ways to invest in municipal bonds, which may offer a way to preserve capital while generating potentially tax-free earnings.
Ultra-short bond ETFs
Find ETFs focused on investing in short duration bonds and other fixed income securities seeking to provide income while preserving capital.
If you're looking for opportunities in financial firms that may be undervalued in low interest rate environments.
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