The increase in interest savings bonds rates and why we should care

A client recently came into our new bit ‘of money unexpectedly. With the desire to act wisely and give his money to grow the way he told us he wanted to invest ‘a bit safer. ” We asked him if he had any idea and he immediately responded: Bonds. Twenty years ago, we all agree that the savings bonds rates were a safe investment. But with interest rates rising as they are today, Yesterday savings bonds rates “sure thing” quickly today to the risk.

We refer to our new customers like Bob. Bob is a savings bonds rates typical retiree. savings bonds rates He lives with his wife, who is retired, and have two adult children and their families. Bob and his wife will receive monthly benefits and pensions from their former company. They also receive IRA distributions from their retirement savings.

Investing in bonds (or bond funds or bond savings bonds rates funds) Pension and / or supplement savings bonds rates the income of social security is a typical move “safe” for many pensioners for the past 20-year-old. With interest rates, the elderly who finished in fixed rate investments high interest rates observed clumsy, and in many cases their principal place of business as well as rise.

However, nothing lasts forever, and because interest rates are cyclical in nature, the bonds are not necessarily safe investments that many people see it. Let us explain: If interest rates fall, bond prices go. Now, with historically low interest for 45 years, we have I think it’s a good chance that prices begin to rise. The Federal Reserve, or as “The Fed” savings bonds rates (led by Alan Greenspan) has announced a major impact on interest rates. The banks will raise interest rates in line with the increase in the federal funds interest rate. Finally, after enough increases in short-term, we expect interest rates to follow the long term. Shortly thereafter, the savings bonds rates bond market have to be achieved and bond prices will be forced in one direction: downwards.

So these It looks like our friend Bob: the short-term interest rates are creeping higher, while the long-term interest rates have not yet been caught. The long bond yields are at the heart of the pitfalls that go so long, bond prices, which because of the inverse relationship between performance and price. Something is definitely wrong with this picture. With higher interest rates can go as long as the bond prices go savings bonds rates, up, too? Remember what we said about the inverse relationship more important, a between bonds and interest rates: It ’s just a matter of time before it is right down the bond markets and bond prices for a long time to start.

Are you confused by all these reports are, do not worry … Many financial experts feel the same way. However, you’re probably asking: What can I protect my investment portfolio? Well, this is what we recommend:

1) Review your investment objectives.

2) Examine the timing of investment.

3) Set Your broker / consultant, the choices you can make about the prevention of loss of capital and income.

The good news for Bob and others like him is that strategies that are to protect his money. A strategy savings bonds rates, that we recommend involves shortening and staggered maturities of individual bonds, so that money is regularly due. This allows Bob to assess the interest rate environment on a regular basis, what to buy him the possibility of further loans from the current interest rate or wait for the exchange rate.

Because of widespread confusion and misunderstanding when it comes to bonds, it is important to remember the difference between bonds and bond funds. Treasury Securities (T-bonds), municipal bonds, corporate bonds, savings bonds rates junk bonds, pension funds, savings bonds rates bonds, mutual funds, municipal bond mutual funds, etc. are some of the most common ways to receive an investor in the market bond participants. But as with any investment, each of these bond Investment has its own rating, risk, performance guarantees and customer expectations. For example, with funds from the U.S. government bond mutual, there is no guarantee of capital.

We are not suggesting that Bob if the bond market to avoid like the plague, except that keeping a watchful eye on him. There is still money to be made by investing in bonds, but with interest savings bonds rates rising, there is clearly an increased potential for loss. Our goal is to maintain a Bob Lifestyle implies choice. We want to enjoy the upcoming holiday with his wife, the new car every four years, summer camps for their grandchildren … Bob has a lifetime of hard work to overcome these things. Looking closely at the portfolio and its investments carefully in the bond market, we are confident that Bob is able to implement his plans, despite rising interest rates.

Don is president of Conrad Capital Management, an independent registered investment advisor in Melville, New York. Before starting savings bonds rates his own company in 1997, savings bonds rates Don held a combined seventeen years working for EF Hutton and PaineWebber, where he served as senior vice president of both companies.

Don can be reached by phone: (631) 439-7878 or via e-mail: also learn more about Conrad Capital Management, please visit our Web site at: http://www.

Don began his career at the savings bonds rates end of 1970 has become an investment company recognized nationally and was stopped after Three years of work by EF Hutton Company in relation to consumers at retail. During his tenure of thirteen years there he spent two years of specialized commercial and 30-year Treasury savings bonds rates, bond. Over the past five years has been senior vice president, focusing his efforts on consulting services, maintenance offices in Manhattan and savings bonds rates Long Island.

In 1993 he was recruited by PaineWebber as senior vice president, Consumer Retail Division. In addition to managing its Client funds, he was asked savings bonds rates by management to conduct a national tour to hone financial adviser Consulting Division. Don is also a savings bonds rates video for the use of modern technologies in the financial services industry. This video has been distributed to offices at PaineWebber International.

After nearly five years at Paine Webber, Don decided to start his dream of Conrad Capital Management to offer its customers more options and pursue Flexibility.

By: Don Conrad
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