When describing the economic outlook before the Joint Economic Committee on May 22, Federal Reserve Chairman Ben Bernanke hinted that the Fed might take initial steps towards reducing its bond purchase program at one of its \u201cnext few meetings\u201d. This means the Fed could scale back its continuing efforts to stimulate the economy by keeping long-term rates at record lows and increasing money supply with bond purchases \u2013 as long as the economy shows sustained improvement.\r\n\r\nMarket Response to Bernanke's Comments\r\n\r\nIn the weeks following Bernanke\u2019s remarks, a number of investors have gone on the defensive, selling bonds in case the Fed starts to decrease its bond purchases. Additionally, 10-year Treasury yields have steadily increased since mid-May, leading some to speculate that rising interest rates are here.\r\n\r\n\r\n\r\nBernanke is scheduled to make comments on Wednesday following a two-day Federal Open Market Committee meeting. He is expected to make additional comments about the Fed\u2019s bond-buying program at this time.\r\n\r\nInterest Rates and Your Investments\r\n\r\nWhatever Bernanke may reveal in his post-FOMC meeting press conference, there are some things you can do now to safeguard your investments from rising interest rates.\r\n\r\nFirst, don\u2019t panic or start selling all of your bonds for cash. You could end up sitting in cash too long, remaining bearish on bonds, and miss an opportunity to collect interest on your investments.\r\n\r\nIt\u2019s also unlikely the Fed will do anything rash.\r\n\r\n\u201cRemember that Bernanke suggested any reductions in the bond buying program will be modest,\u201d says Craig Birk, Director of Portfolio Management for Personal Capital. \u201cAny tapering of the program will be gradual and likely already anticipated by the markets.\u201d\r\n\r\nNext, it may be a good time to take a closer look at your portfolio. What types of bonds do you own?\r\n\r\n\u201cRising interest rates don\u2019t affect all bonds the same way,\u201d says Birk. \u201cIf you own the aggregate bond market, and in the unlikely event that rates spike 2%, your losses should stay under 10% even before interest payments are considered.\u201d\r\n\r\nBut it\u2019s a different story if you own 10- and 20+ year Treasuries. If rates were to spike 2% you could face a loss closer to 15% and 30%, respectively.\r\n\r\nIt\u2019s also important to keep your long-term investment strategy in mind. \u201cI recommend owning a blend of different bonds with an appropriate risk level according to your target allocation,\u201d says Birk.\r\n\r\nYou can easily track your asset allocation and instantly run an Investment Checkup with Personal Capital. Simply sign in to and link your investment accounts.