The Federal Reserve has gradually raised its interest rates since December 2015. But it is only recently that investors have begun to pay more attention to the potential impact of this change. on borrowing costs and their portfolios.

<h3 class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "SEE ALSO: How to manage money, your most neglected good "data-reactid =" 23 "> SEE ALSO: How to manage cash, your most neglected asset

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If you are worried about the rising rate of the 39 environment and what that could mean for you and your investments, you are not alone More than half (58%) of investors have expressed some concern about rising interest rates in a survey conducted by Ameriprise Financial that rate hikes could hurt their investments or create short-term financial difficulties. one or two more rate hikes possible later in 2019, the moment may have come to act if you have similar scruples. Here are some tips for protecting your portfolio in a changing environment. "Data-reactid =" 24 "> If you're worried about rising rates and what it might mean for you and your investments, you're not alone." According to a survey by Ameriprise Financial, more than half of investors (58%) are worried about rising interest rates, and among those who are very worried, many believe that rate hikes could hurt their investments or their investment. If one or two additional rate hikes are possible later in 2019, the time may have come to act if you have similar scruples.Here are some tips to help you get started. protect your portfolio in a changing environment.

Evaluate your financial situation

First, review your portfolio and evaluate the effects of an increase in interest rates on your finances. For example, if you invest in bonds, be aware that generally when interest rates go up, the bonds you own lose value. Rising rates also increase the cost of borrowing, which can affect anyone who contracts a new student loan or mortgage, as well as anyone with a credit card balance or line of credit on their net worth. On the positive side, rising rates offer investors the opportunity to make better use of their cash deposits, such as savings accounts, money market funds and new CDs.

Steps to consider:

  • Evaluate the interest rate risk to which your investments are exposed and determine if it matches your level of trust. Rising interest rates do not have an identical impact on all bonds. Therefore, it may be helpful to use a financial professional to assess your risk tolerance based on your assets, personal circumstances and investment goals.
  • Check your deposit accounts to see what your money is worth and look for rates to determine if your money is making the most money.
  • Review the rates of your existing debt accounts (credit cards and loans) and understand the type of interest you pay. Take note of those who, if any, have variable rates and think about the consequences that higher interest payments could have on these accounts.
  • <h3 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "See also: 8 great personal finance apps to try to have fun (and more) "data-reactid =" 32 "> See also: 8 great personal finance apps to try to have fun (and more)

    Create a financial plan

    Having a financial plan can help ease concerns and build your confidence. If you do not have a plan, it's not too late to develop one. A financial professional can help you get started by identifying your goals and the means to reach them, then selecting strategies and investments that can help you achieve them. Diversify your portfolio to help reduce the negative effects of rising rates and take advantage of this atmosphere.

    Steps to consider:

  • Adopt diversification by spreading your investments across different classes of assets, including stocks, bonds, cash and potentially alternative investments, such as real estate.
  • If you have bonds in your portfolio, it may seem tempting to reduce your holdings of bonds against a backdrop of rising rates, but do not be afraid. Holding a bond until it is due can help avoid a loss when rates go up because you will recover the principal value of the bond as well as the interest payments to the due date. And keep in mind that owning certain bonds, in addition to other assets, remains an effective way of reducing the overall risk of your portfolio.
  • If you want to increase your savings, consider placing it in a high-income deposit account. For example, if you put $ 5,000 in a savings account with a 2.20% rate of return, your savings will earn $ 110 after one year, $ 222 after two years, and so on.
  • Pay attention to your debt

    What are your sources of debt? Is it wise to refinance? Do you intend to incur more debt in the near future? These are all questions you should ask yourself when rates go up. Also check the interest rates of your existing loans and credit cards. If you have variable rate debts, you will have to monitor them. The interest generated by these loans is likely to tend to rise with the rise in rates, so consider looking for a better offer. If you have a large purchase on the horizon and your finances are healthy, remember that rates are still historically low. It may therefore be wise to get a "good" debt right now (school loans or mortgages, for example). .

    Steps to consider:

  • If you have variable rate loans, consider refinancing to ensure a fixed rate.
  • Try to pay off your debt faster. For example, use your tax refund or end-of-year bonus to reduce your debt faster.
  • Call your credit card company to try to negotiate a lower rate.
  • Do not panic if you have to take out new loans. Instead, take the time to shop for the lowest possible rates.
  • Think of the help of a financial professional

    If the changing investment environment prevents you from sleeping at night, it may be advantageous to sit down with a finance professional. A financial advisor can help you assess your situation, develop a plan, rethink your risk tolerance and determine if you need to adjust your investment strategy.

    As with any market change, keep in mind your long-term goals as rates continue to rise. Use it to examine and diversify your portfolio to mitigate losses. With a long-term strategy, you will be better prepared to deal with rising interest rates and anything that could affect your financial situation.

    <h3 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "See also: The bucket approach to invest in the fifties "data-reactid =" 51 "> See also: The stepwise approach to investing in your fifties

    <p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This information is provided solely as a general source of information and is not intended to be the primary basis for investment decisions. It should not be construed as a board designed to meet the particular needs of an individual investor. Please seek advice from a financial advisor regarding your particular financial problems. "data-reactid =" 52 "> This information is provided as a general source of information and is not intended to serve as the main basis for investment decisions and should not be construed as advice. intended to meet the particular needs of an individual investor.Please consult a financial advisor regarding your particular financial concerns.

    <p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Fixed income investments involve risks, including credit risk, interest rate risk and the risk of early repayment and extension. In general, bond prices rise when interest rates fall and vice versa. This effect is generally more pronounced for long-term securities. Diversification does not guarantee a profit. "data-reactid =" 53 "> There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices increase when interest rates fall and vice versa, and this effect is generally more pronounced for long-term securities Diversification does not guarantee a profit.

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