Come on up for the Rising

Come on up for the rising
Come on up, lay your hands in mine…

–Bruce Springsteen, “The Rising”

I’ve been writing a lot lately about the prospect of rising interest rates (i.e., falling bond prices and rising bond yields) in my investment advisory services. The reason why is because rising interest rates will affect so many market sectors. Rate-sensitive sectors such as financials, REITs, preferred stocks, bonds, gold, the U.S. dollar and foreign equities all could be hurt by a wave of rising rates.

If we look at the charts below of the 30-Year T-Bond Yield ($TYX), and the iShares Barclays 20+ Year T-Bond (TLT), we can see the recent trend is rising bond yields and falling bond prices.

And while the short-term trend speaks to rising interest rates, we have yet to see any severe damage to the value of long-term bonds. Still, we have seen interest rates rise from 3.95% to 4.50% on the 30-year T-bond. That move represents more than a 10% rise since October. If we break above 4.60%, we could start seeing a real change in the character of interest-rate sensitive investments.

This is definitely a trend I’m watching as we head into 2010, and it’s a trend I’m already profiting from in my Successful Investing, High Monthly Income and ETF Trader advisory services.