How to Navigate the Amusement Park of Rising Interest Rates

Understanding how rising interest rates affect bond values can help you see the big picture.

A nighttime view of a busy amusement park.
(Image credit: Getty Images)

It is a time-honored tradition that having bonds as part of a diversified portfolio is important, particularly as we age. Young investors can eschew bonds if they are willing to ride out the ebbs and flows of the stock market, but as we get into our 40s and beyond, it is common, and often necessary, to inject them into the equation. But there has been recent turmoil in the bond market, also known as fixed income, driven by the prospect of rising interest rates, something that is important for all investors to understand.

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Disclaimer

*https://www.thebalance.com/stocks-and-bonds-calendar-year-performance-417028#toc-figures-from-1928-2021

Disclaimer

**www.wsj.com/market-data/bonds/benchmarks?mod=md_bond_view_tracking_bond_full

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Jamie Letcher, CRPC®
Financial Adviser, LPL

Jamie Letcher is a Financial Adviser with LPL Financial, located at Summit Credit Union in Madison, Wis. Summit Credit Union is a $5 billion CU serving 176,000 members. Letcher helps members work toward achieving their financial goals and through a process that begins with a “get-to-know-you” meeting and ends with a collaborative plan, complete with action steps. He is a member of FINRA/SIPC, a registered broker-dealer and investment adviser.