Interest Rates – Are You Hedged?

Technical Analysis and Trading Ideas

Interest Rates – Are You Hedged?

What will the impact be if one of the biggest bubbles ever pops?

Are you hedged against rising interest rates?

Let’s start with a poll.


Are You Hedged Against Rising Interest Rates?


My Hedging Strategy


Frequent readers know I hedge my interest rate risk. See here and here.

For starters, I have fixed my interest rates for the mortgage for the next 10 years. In 2028, I should have saved enough to pay off the mortgage, so no interest rate risk on that part of my financial situation.

I do would like to buy a new house within the next two years, and as I expect interest rates to increase even further for the next couple of years (into 2030+), I also invest in ETF’s / investment funds that increase in value when interest rates rise. I have been buying these 4 funds every month.



And that’s what I will keep doing till US 10y rates rise to 3% and German 10y rates to 1%…then I will likely take a break with the buying to see what happens next. By that time, I have my base position (short sovereign bonds = long interest rates) prepared and I can add on weakness (lower rates but higher lows). That’s the plan for now.


+500


US 10y Yield – 10 year rates break out above 2.6%




German Interest Rates – 2y and 10y rates break out

Still a long way to go to normalize…


 

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