Bond Market Sell-Off: 3 of the Best ETFs to Buy Right Now
Rising interest rates don't automatically hurt all stocks. Some stock ETFs are good to buy when interest rates are going higher.
Overview
A conventional rule of thumb in investing is that rising interest rates are bad for stocks. When interest rates go up, that means bond yields go up -- which means bond investors can earn higher income from buying bonds at today's rates. This can reduce demand for stocks and drive down share prices.
The bond market is going through a rapid sell-off, driving up bond yields. The 10-year U.S. Treasury bond yield is over 5%, and the Fed is signaling more short-term rate hikes. We could be in for an era of higher-for-longer interest rates, and that could put downward pressure on stock prices.
Details
However, rising interest rates aren't always bad for all stocks. Some sectors of the economy tend to do better during times of higher interest rates. Let's look at three exchange-traded funds (ETFs) that might be the best to buy for rising interest rates into 2027 -- and see why they could be good long-term choices for your portfolio.
Source
Originally published at www.fool.com.