- If interest rates have peaked, cash and bonds will become less attractive over time
- How can investors reset their portfolios?
Challenging as they are to many aspects of our personal finances, higher interest rates do provide a few easy wins for savers and investors, the most obvious recent example being the ability to earn 5-6 per cent annually on certain savings accounts.
That, even in a time of high inflation, looks like an attractive payout from a risk-free allocation. Bonds have offered something similar: at the time of writing a one-year UK government bond came with a 4.9 per cent yield, meaning a respectable return, as well as additional tax benefits, for those who can simply ignore any price volatility and hold it to maturity.