How can I make money if I believe that interest rates will go up, other than by investing in real-estate or taking out a low-interest loan?

Question

How can I make money on the conviction that interest rates will rise other than:

Buying real-estate
Taking out a cheap loan and lending at a higher rate in the future

score 5 · Answer 1 · answered Mar 15 '11 at 20:21

5

The "pure play" would be using interest rate options. http://www.cboe.com/Products/InterestRateOptionsSpecs.aspx

answered Mar 15 '11 at 20:21

Ralph Winters

901
4
8

score 1 · Answer 2 · answered Mar 15 '11 at 21:57

1

Another option is to short whatever interest rate you think will go up. For example, if you think that interest on treasuries will go up, then short treasuries.

answered Mar 15 '11 at 21:57

David Oneill

431
2
9

score 1 · Answer 3 · answered Mar 16 '11 at 04:36

1

Invest in gold. Maybe will not "make" money but at least preserve the value.

answered Mar 16 '11 at 04:36

Vitalik

5,483
1
27
35

score 1 · Answer 4 · answered Apr 17 '11 at 02:41

1

A very simple and safe, though boring, approach is to hold cash rather than bonds, and move out of cash later once higher yields have lowered asset prices.

answered Apr 17 '11 at 02:41

Havoc P

7,055
27
29

How can I make money if I believe that interest rates will go up, other than by investing in real-estate or taking out a low-interest loan?

4 Answers4