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How Smart Investors Are Taking Advantage of Changing Interest Rates

78 views  2013-07-09 01:10

As long-time readers of these pages are aware, for months I have been warning that interest rateswill soon begin rising. Well, that time is clearly now—we are seeing a significant shift in interest rates. And that means that this is the time for investors to act.

When I began saying that interest rates were due to rise—because I predicted that the Federal Reserve would begin reducing their asset-purchase program—interest rates on 10-year U.S. Treasuries were less than 1.7%.

Even when interest rates broke through the two-percent level, I wrote my article “Why U.S. Treasuries Are Still the Worst Investment,” which warned readers to move out of fixed-income investments.

That opinion certainly hit home last Friday when the Bureau of Labor Statistics (BLS) released the monthly non-farm employment report. For the month of June, a total of 195,000 new jobs were created. (Source: Bureau of Labor Statistics web site, last accessed July 5, 2013.)

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In addition to a very strong report in June, there were significant revisions for April. The BLS initially reported that only 149,000 jobs were created, but that number was later revised upward by 50,000 for a total of 199,000 new jobs; the May report was revised upward by 20,000 jobs.

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