If you’re like me and reluctant to join the stock market frenzy with open arms, then consider buying reverse index funds that bet against Treasury bonds.
This strategy offers a high value alternative to joining a 50%-plus stock market rally since March as long-term interest rates rise on most days when the stock market climbs.
As stocks soar, investors continue to unwind safe-haven positions in staid, low-yielding Treasury bonds – a trend that won’t end any time soon unless the economy sinks into another nosedive. TBT, or the ProShares UltraShort Barclays 20+ Year Treasury Fund, provides twice the inverse performance of its benchmark; it’s definitely a volatility-based strategy but also one that holds merit because the post-1982 bond bull market is dead…
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Recession. Economic crisis. The air is abuzz with these words, from the concerned whispers of colleagues and friends, to the speculation and predictions of the media. Who will sink? Who will swim? How bad is it? How long will it last? Although it came as a shock, the current economic crisis serves as a reminder of the oldest, most pervasive and predictable aspect of life itself: change. The only thing that is certain, is change. In our society, our attitude toward change is often of sticking our heads in the sand. We try to pretend that it doesn’t exist. We become rigid, seeking the illusory permanence of routine to make us feel safe, to feel in control. Many of us spend our lives dedicated to creating a stable environment; a solid career, a dependable spouse. But even the longest marriages can end in divorce, the largest fortunes in the world can dwindle down to nothing.
