While higher yields always mean higher risks, some advisors think with careful vetting the chances of being caught off guard are remote.
Rapid City, S.D., advisor Richard Kahler recently decided to shift some clients' holdings to Franklin Adjustable U.S. Government Securities Fund, an ultra-short bond fund that yields about 2.9%, and which he says, "weathered 2008 very well." While the fund could post losses if interest rates spike, Kahler believes investors now know what's at stake.
"All the clients understand volatility and risk" after 2008, he says with a laugh. "I don't have to go into that speech. They're aware what can happen in a year."
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