SPONSORED — In recent years, the phrase “historic lows” has become a popular way to describe interest rates. There’s a reason for that: At 0.25 percent since December 2008, the federal funds rate is far and away from the average 6 percent rate the nation averaged since 1971, according to Forbes.

While money might be cheap, these rates won’t last forever. In fact, they’re sure to rise — likely sooner than consumers would like. As reported on MarketWatch, Stanley Fischer, vice chairman of the Federal Reserve recently affirmed the Fed’s plan to raise short-term interest rates to somewhere between 3.25 and 4 percent — up from 0 percent — within the next three or four years. When it comes to your investments, this rise could change everything.

Treasury bonds will rise

When federal rates rise, so do Treasury bond interest rates. Today’s rates, currently hovering around 2 percent for a 10-year bond, according to the U.S. Treasury, could rise to as much as 5 percent. This not only affects consumers looking to invest in Treasury bonds, but also does a number on existing bond portfolios that will take a big hit. Since there is no reason for investors to purchase a 2 percent bond when they can purchase a 4 or 5 percent bond, existing bonds will be deeply discounted.

Corporate bond purchases will decline

When the U.S. Treasury is offering bonds at 4 or 5 percent, bond investors know where to put their money, and it’s not in a corporate bond that yields the same amount but presents a greater risk. Therefore, the purchase of corporate bonds will inevitably drop as interest rates rise.

The market will drop… eventually

A rise in interest rates essentially means that money is more expensive to borrow. This is an important principle because banks that borrow money from the federal government will now be paying more for that money. Consumers then, who look to banks for money, will get the ripple effect in the form of raised mortgage rates, credit card rates and virtually all other loan and credit types.

This gives consumers less disposable income, which in turn affects the bottom line of businesses across the nation. Since it’s also more expensive for businesses to borrow money, growth could also be stalled. The culmination of these combined effects on businesses will lead to a drop in stock prices. Potential investors may then view the stock market as “too risky” for investments.

Other markets will follow suit

Diversifying into international markets has historically provided investors with portfolio stability. That said, most international developed markets use similar interest rate policies, often mirroring those of the United States. Investors may opt instead to invest in emerging markets, which poses a greater risk to portfolios, but is not directly affected by a rise in U.S. interest rates.

Real estate investments will dwindle

The real estate market depends heavily on current interest rates. As lower rates motivate property buyers to “strike while the iron is hot.” Unfortunately, when interest rates rise, that iron cools significantly, and real estate investment funds are hit hard. According to Forbes, mortgage REITs perform particularly worse than equity REITs, which don’t perform great either.

Investors will need guidance

It’s inevitable that interest rates will rise, but your investments don’t need to suffer for it. Knowing how to invest strategically in volatile times is the key to a successful investment. Short-term bonds may be a good option, according to Forbes, but playing the market will take some strategic planning, and, according to the Fed, you haven’t got long to get to it.

What you can do

Luckily you can prepare yourself to navigate the U.S. market. Online Trading Academy teaches a rule-based strategy that takes the emotions out of trading. Let’s face it, we all have the tendency to be driven by fear and greed when it comes to trading in the markets.

Trading involves risk and will also result in losses, but applying the appropriate risk management means that gains are higher than the losses if the rules are followed.

Students receive ongoing support in the form of online learning, live instructor-led trading sessions, accelerated solution programs for alumni, and one-on-one student support. These are just some of the resources students can take advantage of at Online Trading Academy.

Students will become part of a community of traders where the education is ongoing. It doesn’t end when the class ends.

To learn more about Online Trading Academy, or view classes in your area, please visit their website.