Uninformed Investors

One of the key factors that we use to decide if we would choose a particular investment is if we understand the particular investment and its risks. A recent survey by brokerage Edward Jones indicates that many investors don't agree with this strategy. Due to recent Federal Reserve actions, interest rates have begun to rise, which you should now be aware causes a decrease in bond prices. However, in the survey, 63 percent of investors didn't know that rising interest rates would impact 401(k)s, IRAs, and other investment portfolios. Further, one-third of investors between 18 and 34 had no idea how interest rates impact a portfolio, and 25 percent of investors over 65 had no idea of the impact of interest rates.