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Fixed-Income Bears Eye End-Run on Fed
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Special to CNBC.com
Think of it this way: Opposites detract. Since bond prices move in the opposite direction of interest rates, and many pundits are predicting higher rates ahead, the corresponding bond price decline could take a chunk out of your portfolio
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Inflation
![[cnbc explains]](http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/_News/_CNBC_EXPLAINS/_IMAGES/CNBC_explains_icon1.gif)
is the most likely trigger of higher rates, so any investor bearish on fixed income will want to allocate bond assets to investments that hedge inflation, such as TIPS, formally known as Treasury Inflation Protected Securities.
Fixed-income securities that perform well in a rising rate environment such as floating-rate loans and short-term bonds are also recommended.
U.S. Treasuries should bear the brunt of rising rates, while the debt of European governments are likely to suffer from the ongoing crisis there. Both of these risks can be managed through short selling.
ProShares UltraShort 20+ Year Treasury, an ETF
that handles the short selling itself, is the most popular vehicle to bet against Treasurys, while investors with margin accounts can short sell European debt on their own.
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Data is a real-time snapshot *Data is delayed at least 15 minutes
