The Fed's rate-hiking campaign gave investors an opportunity they haven't seen in years: Risk-free returns are finally interesting.
Six-month Treasurys are yielding 5.5%, while a bevy of money market funds are offering 7-day yields exceeding 5%, according to Crane Data .
However, at some point, rates will come down — and investors hiding in short-term, high-yielding assets could find themselves with no place to go.
That means investors could be left with few places to go for attractive yields in a lower rate environment as their shorter-term assets mature — known as reinvestment risk.
The benefit of laddering when rates are high is that the longer-dated bonds will have already locked in the higher yields.
Persons:
There's, we've, Crystal Cox, Matthew McKay, McKay, Jerrod Pearce, Pearce, Wealthspire's Cox
Organizations:
Federal Reserve, Data, Wealthspire Advisors, Briaud Financial, CFP, Creative Planning