Prepare for Rising Rates with These ETFs: BSV, BKLN, TBT, VGT, XLI

A slew of positive economic data in the last few days has led many market participants to believe that the Fed will start tapering this month. On the other hand, some analysts still think that there are a number of factors that support the case for continuation in QE at current levels.

While no one can actually predict whether they will or they will not decide on tapering in the upcoming meeting, it appears that the market has already priced in some tapering—about $10 to $15 billion cut in the $85 billion monthly purchases. The actual timing is somewhat irrelevant now—it may start in September, December or early next year. (Read: 3 Cyclical ETFs for an Improving Economy)

In anticipation of tapering, interest rates have moved up significantly, the 10-year Treasury note yield touched 3% yesterday—the highest since July 2011 and a sharp move from 1.6% seen earlier this year. Rising rates have resulted in increasing losses for bonds. (more)

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