Stonegate Financial

Jameson Van Houten Published in the Phoenix Business Journal May 2015 Ask the Financial Experts

May 2015- Check out the Wealth Management section of the Phoenix Business Journal’s 2015 Ask The Financial Experts for educational and relevant topics.ATE 5.27-page-001

Q: I’ve heard that the Fed may raise interest rates this year. What does that mean for my portfolio?

A: The Federal Reserve has signaled that it is unlikely to raise rates until at least June, though many analysts believe that any rate hike will not occur until September if at all in 2015. Many investors are worried about a repeat of the so-called “Taper Tantrum” of 2013, when comments from the Fed caused a simultaneous rout in bout stock and bond prices. History is mixed when it comes to performance of different asset classes during past Fed rate hiking cycles, with bonds, stocks, and cash outperforming at different times. A Fed rate hike should signal confidence that the US economy is able and ready to continue its recovery without the crunch of low interest rates, though each asset class within your portfolio may react differently. The most important consideration in preparing for a possible hike is to develop a plan with your investment advisor to safeguard your portfolio from a variety of scenarios by diversifying across multiple asset classes and limiting exposure to rate sensitive securities.

-Jameson Van Houten, CFP ®

Van Houten, Jameson, (2015 May). Ask the Experts. Phoenix Business Journal.