Rising interest rates are good for most investors! This is counterintuitive, because bond investors know that rising rates cause immediate pain in the form of lower bond prices. Yet eventually the tortoise of higher interest accruals will overcome the hare of immediate price drops.
That “eventually” is why we can only say “most” investors benefit from rising rates. But as our latest article on Advisor Perspectives explains, for the majority of investors, the spending goals towards which their bond portfolios are targeted are longer 𝙙𝙪𝙧𝙖𝙩𝙞𝙤𝙣 (jargon alert!) than the pool of bonds they own…which is the exact formula for benefitting from rising rather than from falling interest rates.
The immediate swing in portfolio values is known as 𝘱𝘳𝘪𝘤𝘦 𝘳𝘪𝘴𝘬, while the long-term effects of higher/lower interest accruals due to higher/lower interest rates is known as 𝘳𝘦𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘳𝘪𝘴𝘬. This article also describes how investors can “immunize” (jargon alert again!) their portfolios, canceling out price and reinvestment risks, by duration-matching their fixed income assets to their their spending goals. (And yes, annuities their own paragraph too.)
https://www.advisorperspectives.com/articles/2025/08/19/rising-rates-good-for-you
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