ETF Investing: Protecting Your Portfolio against Higher Interest Rates and Inflation

by | Mar 15, 2023 | Invest During Inflation | 12 comments

ETF Investing: Protecting Your Portfolio against Higher Interest Rates and Inflation




In this episode of Spotlight, Stephanie Stanton @etfguide chats with Paul Baiocchi, CFA & Chief ETF Strategist at SS&C ALPS Advisors.

Topics covered include ETF strategies for combating higher inflation, rising interest rates and tapping into industry sectors and investment factors benefiting from the changing landscape.

ETF ticker symbols discussed in this episode are:
–ALPS CLEAN ENERGY ETF (ACES)
–ALERIAN ENERGY INFRASTRUCTURE ETF (ENFR)
–ALERIAN MLP ETF (AMLP)
–ALPS HILLMAN ACTIVE VALUE ETF (HVAL)

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To learn more about SS&C ALPS Advisors, visit:

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–LISTEN TO THE SPOTLIGHT PODCAST–
1) iTunes

2) Spotify

3) Google

4) Amazon.com

#ETFinvesting #InterestRates #Inflation…(read more)


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ETF Investing: Protecting Your Portfolio against Higher Interest Rates and Inflation

Exchange-traded funds (ETFs) have become an increasingly popular investment option for both new and experienced investors. These diversified investment vehicles allow investors to gain exposure to a variety of asset classes, such as stocks, bonds, commodities, and real estate, at a much lower cost than traditional mutual funds.

One of the primary benefits of investing in ETFs is that they offer a higher level of flexibility and transparency as you can buy and sell them like individual stocks on a major exchange. Additionally, ETFs tend to have lower fees, better tax efficiency, and a greater degree of diversification, which can help reduce your overall risk exposure.

However, investors should be aware that higher interest rates and inflation can negatively impact their ETF investments. Interest rates are the cost of borrowing money, and when rates rise, it becomes more expensive for companies to finance their debt and can lead to lower earnings and stock prices. Inflation, on the other hand, can erode the purchasing power of your investment returns over time.

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Fortunately, ETF investors can take steps to protect their portfolios against these risks. Here are some strategies to consider:

1. Invest in ETFs that offer exposure to inflation-resistant assets like commodities, real estate, and TIPS (Treasury Inflation-Protected Securities). These asset classes tend to perform well during periods of inflation as they track the rise in prices.

2. Consider investing in interest-sensitive ETFs, such as bond funds or dividend-paying stocks, that have historically performed well in rising rate environments. These types of investments tend to generate income, which can help offset the negative impact of higher rates.

3. Diversify your ETF holdings across different asset classes and sectors to reduce your overall risk exposure. This can help mitigate the effects of rising rates or inflation on any one segment of your portfolio.

4. Monitor your ETF investments regularly and make adjustments as necessary to maintain your desired exposure levels. This may include rebalancing your portfolio or switching to different funds if economic conditions change.

In conclusion, ETF investing can be a powerful tool for building wealth over the long term. However, it’s important to be aware of the potential risks associated with higher interest rates and inflation and to take steps to protect your portfolio accordingly. By diversifying your holdings and investing in inflation-resistant assets, you can help safeguard your investments and achieve your financial goals.

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12 Comments

  1. sunitaa

    My favorites are the 3* leveraged ETFs. High gains but high risk for a lot of people.

  2. Arhamm

    Interest rates govern how much of a premium borrowers pay to lenders on their loans. Higher interest rates encourage less borrowing, and lower interest rates encourage more borrowing.

  3. Harry Jake

    Etfs are safer investment diversification protect portfolio.

  4. Nadi malik

    Bond prices often fall as yields rise. You can hedge against rising rates by switching your bond portfolio from long-term to short-term bonds.

  5. Mainasim Malik

    Many people hedge against rising interest rates by selling bonds.

  6. arojkamli

    when investing in the markets, these six strategies can help protect your portfolio.

  7. Afsa Khaton

    The efficient frontier comprises investment portfolios that offer the highest expected return for a specific level of risk.

  8. Maher Muni

    The tips to protect your investment portfolio from rising interest rates ·

  9. Samia Sayyam12

    Best one Really amazing information

  10. Digital Engineer

    An amazing episode with as usual good information about investment

  11. Unique and amazing videos

    This program is really enjoyable which cover my all questions regarding investment techniques

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