- Vibha
- 14 Jun 19
- Investments,Investor

Over the past few quarters, the rise in interest rates has been steady and gradual. Not only has this created a climate of grave economic uncertainty but it has also rendered various financial instruments unviable. Deposits and loans have become more expensive and investors have largely begun to worry about how this increase would affect their portfolio.
However, dealing with rising interest rates is not as challenging a task as it appears to be. All you have to do is widen your monetary avenues and explore newer investment options. Here are a few ways which can help you stay secure even in the most unpredictable times.
Exit Debt Funds
If you are invested in long-term debt funds, it would be wise to exit them as early as possible. When interest rates rise, bond yields tend to decrease. This inverse relationship between them causes any type of long-term investments to become extremely volatile and unsustainable. Thus, shifting towards short-term and liquid funds in this period would be a more prudent decision.Quit Low Rated Bonds
One of the best ways of dealing with rising interest rates is to withdraw from any low rated corporate bonds that you may have been invested in. If the rating of the bonds ranges between AAA, AA, A and A+, there is no harm in holding them. But, bonds with ratings that vary from B to D will face major problems in managing their debts during an interest rate increase. Thus, it is wise to quit them.