6 Risks Every Investor Faces

Interest-rate risk. In recent weeks, interest rates on common investments like the 10-year treasury have fallen. Yields remain near historic lows, and rates could remain that way for quite some time. But experts say current 10-year treasury yields of around 3 percent aren't sustainable over the long haul. That means at some point, investors will need to brace for rising interest rates, which can damage fixed-income portfolios. When yields rise, the price of existing bonds fall. The standard rule of thumb is that for every 1-percentage-point increase in treasury yields, investors should expect a bond fund to decline by the amount of its duration, Benz says.

Twitter: @benbaden

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