Message Font: Serif | Sans-Serif
No. of Recommendations: 0
This is an especially thorny question because people seem to think interest rates are starting to rise. Already mortgage interest rates are up a bit. That means any fixed income investment will lose some market value as interest rates rise. Dividend paying stocks are a reasonable alternative, but they too will respond to rising interest rates.

Safest is to park your funds in money markets or in fixed incomes with a well defined term, say 3 to 5 yrs. CDs, or bonds where you own the bond itself and hold to maturity. This preserves capital at little risk but with modest interest income.

Rising interest rates will also slow the US economy and hurt stocks a bit. Buying on a dip or correction can still be the best you can do over long term. Or look for international investments where you think interest rates will be stable for a while (if you can find one).

Otherwise, if you are willing to take the risk, a diversified portfolio of good quality stocks can be your best move for the long term.
Print the post  


TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.