Bonds
With interest rates expected to start to climb next year as the economy continues to stabilize and the Fed begins to taper its bond-buying program, the price of bonds will likely begin to fall next year. That doesn’t matter for folks who own individual bonds and plan to hold them to maturity, but weak prices will hurt the value of bond funds. Switching from intermediate- to short-term bond funds will shield you from interest rate hikes but will also bring a lower yield.
