Get Short Treasuries Now and Get Paid Long Term
The simplest way to bet on higher rates is through the Proshares Short 20+ Year Treasury ETF (NYSE Arca: TBF).
It’s a $600 million fund designed to rise at the same rate as long-term Treasuries drop.
TBF is an inverse fund, so if long-term Treasuries rise, TBF will fall as the same rate.
Right now, it’s been acting well, as it looks to have bottomed in July and recently surged past the resistance levels of the last two months.
My suggestion is to add TBF to your portfolio now and use a hard stop at $20.30, the July low. That’s just 5% below current levels. I think on the upside TBF could regain $25 within 12 months, maybe sooner. So you’d be risking 5% for a potential 20% gain.
Right now the signs point to lower bond prices and higher rates.
Remember all trends, even secular trends, come to an end and then reverse.
If you catch them early, they can be very profitable.
Source: Money Morning
