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It's Crazy How Many Americans Have No Clue What Rising Interest Rates Are Doing To Their Investments

Wednesday, August 21, 2013 - 7:21 PM
According to a new study by Edward Jones, one of the country's biggest retail brokerages, 63% of Americans don't know how rising interest rates will affect their retirement portfolios – their 401(k)s, IRAs, et al. – and 24% say they feel completely in the dark about what rising interest rates mean.

Americans Confused About Rising Rates - Business Insider
7
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
1. Wednesday, August 21, 2013 - 8:02 PM
"If the sell-off continues, and the Federal Reserve does decide in September to begin to slow the pace of monthly bond purchases it makes under its quantitative easing program – as the consensus on Wall Street expects – more and more Americans will be waking up to the reality that bond funds can in fact lose money."

My FINPX (very small holding in my 401K portoflio) is losing 9% YTD already; we are already awake to the reality that bond funds are losing money.

it is fair to say that there is no place to hide in today's market.  Equity and bond funds go down at the same pace.  The allocation of 60% equity/40% bond fund (as an example) for risk mitigation no longer works.   

It demands special measure for special financial climate.  My approach is to "gradually" move my equity in 401K to stable value fund (3% APY).  Fortunately I have a very small holding (near zero) in bond fund.  To be specific, I am thinking about 15% in equity eventually; hopefully before the stock market starts its major downward trend.   
3
51hh51hh1,460 posts since
Jan 16, 2010
Rep Points: 6,348
2. Wednesday, August 21, 2013 - 8:08 PM
Re: 51hh @ 1. Wednesday, August 21, 2013 - 8:02 PM

See my reply 2. Wednesday, August 21, 2013 - 8:02 PM @ http://www.depositaccounts.com/forum/thread/14926-wells-fargo-to-cut-2300-mortgage-jobs-as-refinancing-slows.html
3
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
3. Wednesday, August 21, 2013 - 8:40 PM
SB,

 Read your post.  It is anybody's guess when the stock market will react strongly to Fed's action.  I expect it to be sooner than later.  We all know September and October are dangerous months for the stock market. 

BR,

51

 
2
51hh51hh1,460 posts since
Jan 16, 2010
Rep Points: 6,348
4. Wednesday, August 21, 2013 - 9:16 PM
I agree 51hh.
2
ShorebreakShorebreak2,364 posts since
Apr 6, 2010
Rep Points: 12,590
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