Seeking Alpha

Yield searching investors face some very tough risk versus reward scenarios in today's rising interest rate environment. The recent carnage in a multitude of yield plays, such as long-term investment grade corporate debt, preferred stock, junk bonds and REITs reveals that there are few safe harbors when expectations turn to rising interest rates. One of the biggest mistakes an investor can make in a low yield environment is to chase yield by purchasing a security with an extended maturity or in some cases, no maturity at all. Any rise in interest rates, especially from historically low levels, will magnify losses the longer the maturity of the investment. On the other hand, if you limit your investment horizon to about...

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