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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