The Federal Reserve’s rate hikes getting you down? You’re not alone.
A lot of readers have written in, worried that the Fed’s plans to increase interest rates in 2018 are going to hurt their portfolios. Investors starved for income have been piling into high-yielding assets that could get hit by a selloff if interest rates rise.
Those assets would go down because when the Fed increases interest rates, it causes rates all around to go up. So if you hold a bond that pays an interest rate from before that rate hike, its resale value will decline because there are now new bonds that pay higher interest rates, which makes the older, lower-yielding bond less desirable.…