Charles Schwab'​s Colin Martin recently posted a blog entitled, "Short-​Term Investment Options for a Rising-​Rate, Volatile-​Market Environment." He tells us, "Now that short-​term interest rates have moved up, investors can get better returns on money invested for near-​term needs than they could during the era of zero interest rates from 2008-​2015. Moreover, the recent increase in stock market volatility may make these relatively stable investments even more attractive to investors seeking to avoid sharp ups and downs. We'​ll discuss some investments that allow investors to take advantage of higher interest rates without taking on too much interest rate risk or credit risk." The piece explains, "​Most bond yields have risen -- but have you been rewarded with higher income payments? Just because short-​term bond yields have risen over the past few years doesn'​t mean that all short-​term investments have rewarded investors with a reciprocal rise in yield.... [​T]​he slope of the yield curve -- the difference between short- and long-​term yields -- has flattened lately.... Short-​term rates have risen by a lot more than long-​term rates over the past year. To get a yield above 2% today, for example, investors can simply invest in a 1-​year Treasury bill. Just one year ago, you'​d need to invest in Treasury security with seven years to maturity to get a similar yield. We think this is important -- you don'​t need to take on as much risk to get higher yields today compared to the past few years." The blog adds, "Let'​s take a look at some investments that may offer higher yields today." These include: Ultrashort bonds, Short-​term bonds, Short-​term municipal bonds, and Investment-​grade floating-​rate notes.

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