Markets

Rising Rates & Your 401(k)

06photo / Shutterstock
06photo / Shutterstock

When fashions change, last year's styles lose value. I learned that lesson when bell bottoms went out of fashion (probably before you were born). Fortunately, this change didn't happen overnight, so I had time to 'retire' some of my treasured possessions and make room for the new styles. Bond markets operate the same way, but the current environment triggers a more instantaneous revaluation of last year's bonds. If all you consider is the price reductions some bond funds will incur as rates rise, then you will think of the glass as being half empty. But perhaps it's more constructive to focus on the opportunity that rising rates offers a long term saver.

How to Think About Rising Rates and Your 401(k)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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