When is 3 percent better than 6 percent? Yeah, we all know the answer, but only until the prices of the securities we already own begin to fall. Then, logic and mathematical acumen disappear and we become susceptible to all kinds of special cures for the periodic onset of higher interest rates. Well be told to sit in cash until rates stop rising, or to sell the securities we own now, before they lose even more of their precious Market Value. Other gurus will suggest the purchase of shorter-term bonds or CDs (ugh) to stem the tide of the perceived erosion in portfolio values. There are two important things that your mother never told you about Income Investing: (1) Higher Interest Rates are good for investors, even better than lower rates, and (2) Selecting the right securities to take advantage of the interest rate cycle is not particularly difficult.
Higher Interest Rates are the result of the Governments efforts to slow a growing economy in hopes of preventing an appearance of the three headed inflation monster. A quick glance over your shoulder might remind you of recent times when the government was trying to heal the wounds of a misguided Wall Street attack on...
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