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How can I make money on the conviction that interest rates will rise other than:

  1. Buying real-estate
  2. Taking out a cheap loan and lending at a higher rate in the future
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    I question the premise/assumption that buying real estate is a way to take advantage of knowledge of rising interest rates.
    – Chris W. Rea
    Mar 15, 2011 at 22:20
  • I agree with Chris, if interest rates are going up this would cause real estate to soften, as money is more expensive to borrow, so demand for taking out loans and buying property would fall.
    – Victor
    Jan 20, 2012 at 5:28

4 Answers 4

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The "pure play" would be using interest rate options. http://www.cboe.com/Products/InterestRateOptionsSpecs.aspx

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Another option is to short whatever interest rate you think will go up. For example, if you think that interest on treasuries will go up, then short treasuries.

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Invest in gold. Maybe will not "make" money but at least preserve the value.

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A very simple and safe, though boring, approach is to hold cash rather than bonds, and move out of cash later once higher yields have lowered asset prices.

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