As the Fed prepares to raise rates, learn steps you can take with your stocks, bonds, and debt.
There’s surprisingly little you need to do.
If you actively manage a stock portfolio, do not sell stocks because you were told to “never fight the Fed.” Warnings to that effect in December have already morphed into a view that rising rates indicate a strong economy, which should be good for stocks. Nobody knows anything.
Instead, consider moving some of your stock capital to financials, and defensive sectors.
If you actively manage a bond portfolio, consider structuring a bond ladder so you can move income to longer bonds with higher yields.
Pay off your consumer debt, if you have any. This is always a good idea but especially so ahead of even higher interest rates on such damaging debt.
There’s no rush to refinance your home mortgage. Rates on 30-years show a mixed response to Fed activity, and current rates are just slightly above the recent range’s midpoint.
The best approach is probably to try snagging a 4% rate later this year. There’s no rush to make a move.
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