There are various strategies investors can use to help offset the impact of rising rates, but in order to avoid taking on substantially more risk in your portfolio, your best bet is to implement a combination of strategies.
"The worst thing you can do is think there's one single panacea to the problem," said David Lafferty, chief market strategist with Natixis Global Asset Management.
"There are lots of things you can do, but every one thing that helps you manage interest-rate risk by itself has a downside risk," he added. "There's no free lunch when it comes to reducing exposure to higher rates, so you want to take a diversified approach."
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Lafferty, who believes rates could hit the mid- to high 3 percent range by the end of this year or early next, said that now is the time to be making portfolio adjustments. "Interest rates are notoriously difficult to predict," he said. "They can move very quickly, and it's difficult to react to rates, so you want to be out in front of it."
Scott Cramer, president of financial advisory firm Cramer & Rauchegger, said reducing exposure to long-term bonds should be first on investors' priority list.
"If you are going to use bonds, stay in short- or medium-term bonds," he said, as they will be less sensitive to rising rates.