Adapting Your Investment Strategy to Interest Rate Fluctuations - Part 3
3 Strategies for High Superannuation Balance Holders in a Fluctuating Rate Market
For SMSF holders, rising interest rates present both challenges and opportunities. Here are three tips to navigate this environment:
Optimise Fixed Income Investments: When interest rates go up, the value of your bonds may drop. To protect your investments, consider buying bonds that mature sooner or bonds with interest rates that can change. These options might not be as affected by rising interest rates.
Review Margin Accounts: If you use margin accounts, be aware that rising interest rates mean higher borrowing costs. Regularly review your margin strategy to ensure it remains cost-effective and doesn't overly leverage your investments.
Take Advantage of Higher Savings Rates: With higher interest rates, you might want to increase your cash holdings in high-yield savings accounts or term deposits. This could provide a stable return and liquidity for your SMSF.
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Disclaimer: This information is general in nature and does not take into account your personal financial circumstances, needs or objectives. It does not represent financial product advice. You should always seek independent legal and financial advice before making a decision in relation to a financial product. You should consider your own circumstances, needs and financial objectives before making a decision. Before acting on any information you should consider whether it is appropriate for your situation and seek independent financial advice if necessary.