Bond investors: Heed warnings about rise in rates
BOSTON – Super-low interest rates will eventually rise, and when they do, bond investors could be stuck with losses.
It's a warning that's been heard frequently in recent years. Often, it's coupled with a reminder of the huge amount of cash – more than $1 trillion – that bond mutual funds have attracted in the past five years.
Warnings about rising interest rates have become louder in 2013, partly due to a spike in rates during the first couple weeks of the year. Consider this one: The prospect of higher rates "is looming ever-closer" says Art Steinmetz, chief investment officer at OppenheimerFunds, who describes a rate increase as "a dust storm that we're going to run into one of these days."
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