Investment Advisory Team
Been Down So Long It Looks Like Up to Me is the name of a famous 1966 novel by author Richard Faria. It might also describe how savers feel now that short-term interest rates have finally risen. One percent interest rates on short-term vehicles wont make anyone rich, but it feels a lot better than zero.
As rates rise, investors will see more advertisements for savings vehicles. Investors should choose carefully. In the past, for example, many ultra-short term bond funds have exhibited far more risk than investors probably signed on for (chart).
One good question to ask is whether the savings vehicle is safe by nature, or if it pushes the envelope in an effort to maximize yield. For conservative investors and savers, a low risk approach is better.
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