Daily Archives: March 5, 2013

Asset Allocation & Higher Interest Rates

One of the major concerns for investors for the near-term future is the expected rise in interest rates. With the price of money at or near all-time lows in the modern era, the obvious question arises: what to do now? The short answer: more of the same. Assuming, of course, that your strategy is one of remaining broadly diversified across the major asset classes and maintaining a robust rebalancing strategy. That doesn’t satisfy some analysts, who argue that more radical measures are necessary. It’s different this time, the reasoning goes, and so strategy must be different. Well, it’s always different, but a prudent strategy of broad asset allocation and rebalancing tends to deliver average to above-average results vs. a broad array of portfolios that try to do better.

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