A great bond alternative

As interest rates rise bond values fall. What that means for bondholders is that although you'll still get your coupon payments and you won't lose your principal if you hold to maturity, you won't be keeping pace with the market. For example, if you own a 10 year bond that's paying 2% and the current market is offering 3% you will miss this significant interest rate advantage. On top of that, if you want to sell your bond you'll no longer receive 100 cents on the dollar.

Most investors shy away from owning bonds, especially those with longer maturities, when interest rates rise. If inflation accompanies this move in rates then the "real" value of the bond falls even further. But many have a bond proxy sitting right at home that isn't tethered to the downside of higher interest rates. And it's one that can actually appreciate. What is it? Look here: home sweet home