First Financial Consulting was featured in Reuters in an article examining how the Federal Reserve’s latest interest-rate increase could affect borrowers, savers, homeowners, and investors. The article followed the Fed’s September 16, 2026 quarter-point rate increase, its first increase in more than three years.
In the piece, Greg Welborn, President and financial advisor at First Financial Consulting in Pasadena, California, discusses the impact of rising interest rates on bonds and why individual investors can run into problems when treating the bond portion of a portfolio too simplistically.
Greg Welborn on Investing in Bonds When Rates Rise
Greg explains that bond prices generally move in the opposite direction of interest rates: when rates rise, existing bond values tend to fall. He cautions that this relationship can make bond investing more complicated than many investors realize, particularly when they rely on a “set and forget” or simplistic buy-and-hold approach to the fixed-income portion of their portfolios.
Key Takeaways from the Article
- Rising interest rates can reduce the market value of existing bonds
- Bond investing requires an understanding of how changing rates affect prices and yields
- A passive “set and forget” approach to bonds can expose individual investors to risks they may not anticipate
- Higher rates can create opportunities for newly issued bonds offering higher yields
- Interest-rate changes should be considered within the context of an investor’s broader portfolio and financial plan
Overall, the Reuters article highlights how changes in interest rates can have very different effects across a household’s finances. Greg’s comments reinforce the importance of managing fixed-income investments intentionally rather than assuming bonds are automatically a simple or low-risk component of a portfolio.
