When central interest rates rise, it won't just be homeowners feeling the squeeze - retirees' portfolios will also be in for a shock. Those approaching their golden years are often advised to shift a larger portion of their portfolio to less volatile investments, such as bonds. While these investments provide a generally stable appreciation, rising rates can spell trouble. When will rates rise? The official answer: eventually. Although inflation is back on track at 2%, economic pundits still don't expect to see a rise in the overnight lending rate until at least mid-2015.
Canadians Don't Know How To Protect Portfolios
Most Canadians are aware of the impact of rising rates on their portfolios - and they'd like to take steps to protect themselves. They just don't know how, according to a recent study by AGF Management. While seven in 10 are worried they haven’t saved enough for retirement, six in 10 admitted to not taking the necessary steps to protect their portfolio against the threat of rising interest rates. What’s the reason? It’s simply because we lack the knowledge. In fact, the majority of Canadians (71%) said they are somewhat or not at all knowledgeable about investing.