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Four Ways to Play the Bond Market Bubble

beebee
edited October 2011 in Off-Topic
One of the four is an aggressive bond strategy that may not work until the FED finishes playing Twister:

"If you're aggressive and want to profit from the looming shift in capital that will eventually accompany our profligate spending rather than simply defend against it, consider shorting long government bonds using an inverse fund like the Rydex Inverse Government Long Bond Strategy Fund (MUTF: RYJUX). It's down 26.82% year to date and that means mainstream investors are still looking the other way. Just as we are using short duration to our advantage as a defensive measure, this fund actually capitalizes on those who maintain a long duration. That means you can play offense.

http://moneymorning.com/2011/09/30/four-ways-to-play-the-bond-market-bubble/

Comments

  • fundalarmfundalarm
    yeah.. many financial advisers and their clients got killed buying TBT in the last 12 months. i would NOT recommend such trade. one doesn't know the timing of increase in interest rates, and in the meantime the holder keeps paying the carry (interest) being short the long bond.
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