Where To Invest When Bond Yields RiseInvestors are concerned that the Federal Reserve will unwind its quantitative easing program — the massive bond purchases that have suppressed yields and boosted stock performance. When bond yields rise as the U.S. economy improves and the Fed takes actions, how might it impact the stock market? What sort of stocks do you add to your portfolio and what do you trim? The rise in bond yields is not the end for stocks, market researcher Birinyi Associates analysts found. The analysis of nine periods of rising rates since 1962 found that the beginning of those cycles didn't necessarily coincide with a peak in stock prices, as shown in the table below: The S&P 500 gained 7.5% on average in the six months after rates started to climb, while technology stocks averaged a 15.2% gain, industrials were up 11.5% and materials rose 10.3%.
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