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How can I invest to make money on rising interest rates?

5 Answers

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  • 1 decade ago
    Favorite Answer

    A safe way of doing this is to ladder short term certificates of deposits.

    EXAMPLE: Starting out with just $6,000 that you won't need to withdraw.

    Invest $1,000 in January for 6 months.

    Invest another $1,000 in February for 6 months (interest rates will be higher).

    Invest another $1,000 in March for 6 months (interest rates will be higher).

    Invest another $1,000 in April for 6 months (interest rates will be higher).

    Invest another $1,000 in May for 6 months (interest rates will be higher).

    Invest another $1,000 in June for 6 months (interest rates will be higher).

    In July, the $1,000 you invested in January has matured. Roll it over for another 6 months CD at a higher rate.

    In August, the $1,000 you invested in February has matured. Roll it over for another 6 months CD at a higher rate.

    And so on and so on.

    The higher the amount you deposit each month, the higher will be the interest rate, even though you are investing just for 6 months.

  • 1 decade ago

    The value of a bond drops as interest rates rise. You need to make some type of opposite investment.

  • 1 decade ago

    You can do it in a lot of ways

    list from riskest to the safest

    1.Buy interest rate products (derivatives) such as the Eurodollar futures, contracts on fed funds

    2.Shorting treasury futures (derivatives)

    2.Shorting bonds (like buying the ETF "TBT")

    3.Getting more positions in gold (like GLD)

    Source(s): http://www.cmegroup.com/ (for interest rate linked derivatives products)
  • Ted
    Lv 7
    1 decade ago

    Short bond futures. Bond values fall as rates rise.

  • 1 decade ago

    do u know online forex trading? we can make good profits but need some initial knowledge to trade forex markets but very profitable that i and my friend making

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