• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Stock Trend Alerts

Essential Market Ideas and Investing Strategies

  • Newsletter Reviews
  • Hot Stocks
  • Technology
  • Financial News
  • Secrets of the Pros
  • Analysis
Home » How to Safeguard your Retirement from Rising Interest Rates

How to Safeguard your Retirement from Rising Interest Rates

One by one, the dominoes keep falling.

Practically daily, investors witness the impact of interest rates on one asset class after another:

  • Gold prices have fallen over 16% since last summer, giving back over 60% of 2020’s rally in prices.
  • Expensive tech and growth stocks corrected in February.
  • Mortgage rates have risen the most in three years. Suddenly that $600,000 house will cost more in monthly payments.

For much of the past 40 years, falling interest rates were a tailwind for these markets. Now the 10-year Treasury yield threatens them all as it tries to end its long-term downtrend as shown below.

But the turmoil isn’t over just yet. There is another domino about to fall.

Retirement!

[Exclusive: Dividend Expert Reveals His Biggest Income Secrets… Free of Charge!]

That’s from the impact of rates on the stocks you hold to produce income. So, if you’re in or near retirement especially, it’s time to rate-proof your portfolio. Here’s how…

KNOW THINE ENEMY

Income-generating stocks are vulnerable to rising interest rates in two ways:

  • As a saver, you know there aren’t many ways to generate a decent income in this environment. Declining long-term yields steadily made income-producing stocks more attractive. But the reverse will also be true. Rising rates will lure investor dollars back to fixed-income securities.
  • Debt payments. Higher yields mean higher interest payments on debt (like that $600,000 house I mentioned earlier). That also translates to less net income for indebted companies and potentially falling dividend payouts for investors. The bad news is that many high-dividend companies operate in industries with lots of debt on the balance sheet, such as utilities.

But there is one type of income group that is less sensitive to rates. In fact, these stocks thrive when percentage points are ticking up.

FOCUS ON DIVIDEND GROWERS

They outperform ALL OTHER stocks when rates are rising. How? They grow their dividends.

I’m not talking about companies with high dividend yields. I mean companies that continuously grow their dividends.

[Extra Income: Dividend stocks are booming right now, giving folks a chance at massive income in 2021]

A recent BMO Capital Markets’ study shows that when the 10-year Treasury yield had a sustained increase, dividend growth stocks returned over twice that of stocks with high dividend yields. They even beat the overall return of the stock market during those periods.

That’s because dividend growers offer a unique advantage.

They allow your yield on cost to keep rising. That is, you earn more income compared to the price you originally paid for the stock. It’s one of Ted’s favorite metrics when evaluating a new income opportunity. Plus, a growing dividend signals financial stability, and ongoing opportunities to keep expanding the top and bottom line.

That’s why we’ve packed the Bauman Letter model portfolio with companies that have a history of growing dividends at a fast clip. In fact, five of our model recommendations have grown their dividends by more than 10% per year for the last five years.

[Bonus: The Safest 9% Dividend… Top Three “Extreme Dividend” Stocks, And Much More]

If you are nearing or in retirement, now’s the time to protect your portfolio against rising rates.

Best regards,

Clint Lee
Research Analyst, The Bauman Letter

Read more from Clint Lee at BanyanHill.com

You Might Also Like...

  • 3 Top Infrastructure Stocks Set to Benefit from Massive Bill
  • The 4 Top Artificial Intelligence Stocks as Demand Continues to Soar
  • Two Ways to Play the Coming Flood of Metaverse IPOs
  • Three Penny Stocks to Add to Your Watchlist in 2022

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Subscribe to Stock Trend Alerts

By submitting your email address, you give Stock Trend Alerts permission to deliver investment research to your email inbox. Privacy Policy | How It Works

Popular Posts

  • Martin Weiss Docket No. OP–1670: 12 Inflation-Beating Stocks
  • Jim Rickards – The Return of American Energy: Profit from the Green Lie
  • Andrew Zatlin: Biden’s Puppet Master Exposed and How to Opt Out of the Digital Dollar
  • Why 2023 Could Kick Off a “Cash Frenzy” in Stocks
  • Dylan Jovine 21st Century Battlefield: 4 Companies Changing Warfare
  • Infinite Energy Stock: The Tiny Company Dominating Tesla in the Trillion-Dollar Green Energy Race
  • Dylan Jovine Search & Destroy: 3 AI Software Stocks Revolutionizing Warfare
  • BREAKING: Military to spend billions on “Living Missile”

Recent Posts

  • 25 Super-Woke Companies You Do Not Want in Your Portfolio with Alexander Green
  • Jeff Clark Trader: The Currency Trading Retirement Blueprint
  • Jason Williams Blue Gas: The Tesla Killer Fuel Cell Revolution
  • Andrew Zatlin: Biden’s Puppet Master Exposed and How to Opt Out of the Digital Dollar
  • The AI Takeover: Jason Bodner’s Quantum Edge Trader Smart Tech

Topics

AAPL Advertorial Amazon AMZN Artificial Intelligence Battery Bear Market Biotech Bitcoin Blockchain Clean Energy Cloud Computing Coronavirus COVID Creative Cryptocurrency Dividends E-Commerce Electric Vehicles Elon Musk Energy Ethereum Gold Growth Stocks Inflation Interest Rates International Jeff Brown Louis Navellier Market Crash MSFT Oil and Gas Options Prediction President Biden Recession Retirement Russia Semiconductor Supply Chain Tesla The Fed TSLA Volatility Warren Buffett

Copyright © 2023 · Stock Trend Alerts - Essential Market Moves and Investing Ideas

Nothing on this website should be considered personalized financial advice. Any investments recommended here in should be made only after consulting with your personal investment advisor and only after performing your own research and due diligence, including reviewing the prospectus or financial statements of the issuer of any security.

Stock Trend Alerts, its managers, its employees, affiliates and assigns (collectively "The Company") do not make any guarantee or warranty about the advice provided on this website or what is otherwise advertised above.

The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. The Company is not affiliated with, nor does it receive compensation from, any specific security.

To the maximum extent permitted by law, the Company disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations provided herein prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

About Us | How it Works | Privacy Policy | Terms and Conditions | Contact Us