“Cash is trash these days because yields are too low. You lose purchasing power after inflation and taxes. You’ll find that on a five-year CD you’re going to earn a little over 2%. You can earn a higher yield with longer maturity bonds, but investors fear rising interest rates. Once the Fed starts to raise short-term rates (and perhaps before), other rates will rise. That will reduce the value of bonds and bond funds. A modest rate increase will reduce the value of the bonds by more than one year’s interest income. When you want higher yields than cash and fear what rising rates will do to bonds, consider putting the safe or fixed-income portion of your portfolio in certain types of annuities.”
http://www.investingdaily.com/20770/income-investing-when-interest-rates-rise/
Tip Freedomwat.ch Staff with Bitcoin