If interest rates rise, would that really hurt my bond ETFs? I know when interest rates rise, prices fall.?

Question

So the ETF would fall too right? Im probably an idiot for asking.

Answer 1

If you own a short term bond fund, the fund will go down at first but it will go up again as the bond expire and management buys more bonds at the current interest rate.  

however, the first answer is correct.  You should have a some equity exposure to from the SPY...

Answer 2

There are no stupid questions if asked sincerely

Your bond ETFs would fall, so balance things out with a good stock ETF such as "sdy"

http://finance.yahoo.com/echarts?s=sdy

One will go up, one down but you are diversified so in the end you are fine

Answer 3

while it is true that when interest rates rise, bond values fall....you can lock into your bond return by not selling the bond before it hits maturity.  but your etf returns are going to depend on how passively (or not) it is managed by issuer.

Answer 4

You are better off purchasing a bond  outright than paying a management fee for an etf bond fund. While the price should fall, they should be buying new bonds at higher interest rates to offset that, so it is hard to say for sure how the fund will deliver.If you buy a bond and hold it to maturity ( make sure it is non cancellable), you will get your interest, so long as the company doesn't go bankrupt. So, talk to your broker about liquidating your ETF bond fund and see if you can find something better.