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August 2015 Issue of PFwise.com's Monthly Newsletter
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PFwise.com Monthly Newsletter

Help you make wise personal finance decisions

Hello friends, welcome to the August 2015 PFwise.com Monthly Newsletter!  In this issue, we will show you 4 Investment Strategies in a Rate Rising Environment.

After seven years of low rates, we facing several uncertainties right now - how quickly will the Fed raise rates and how quickly that will affect value of current investment holdings.  Low rates have driven investors to take on added risks in the hunt for yield, now it's time to think about the alternative strategies.
 
1. Equity-income Funds
Equity-income funds are like hybrids between equity and bonds.  If you are interested in them, look for companies with histories of paying increasing dividends.  Risks do exist with this strategy, see our discussion here.

2. High-yield Munis
If you are a wealthy family in high tax bracket or an investor in high-tax states such as California, the tax-exempt municipal bonds could be attractive to you as their tax-equivalent yields are very good.  How good they could be?  See our discussion here.

3. Floating Rate Notes
Not all bonds are created equal.  Many wealthy investors have started moving money out of high-yield bonds and into floating rate bonds because such bonds will benefit when the short-term rate rises.  A brief introduction to them is here.

4. REITs
REITs have been out of favor for a while due to valuation concerns.  But if you are a long term investor and want exposure to the U.S. real estate markets, REITs should be part of your portfolio.  Our blog post merely points out this as an option, you need to do your own research to find the right REIT that fits your needs.

Thank you for your readership!  I hope this newsletter helps you think about what to do when the Fed starts raising interest rates and I wish you well when it happens!

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The Bottom Line
 
Personal Finance is a broad and complicated topic, and needs lot of knowledge and forward-looking planning.  I hope I can share my knowledge and use my skills to help you make wise PF decisions.

Kaisheng (Kenny) Bao, CFA, MBA
Independent Agent
National Producer Number 16505199
PFwise.com
(571) 482-9394


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