Monday, June 29, 2009

Interest Rates Will Reverse: Stunning Treasury Yield Curve Chart


Chart From Yahoo:




Rates will not stay this low forever. Rates will go up, that much is a certainty. The exact timing is in the only uncertainty. The question is what is the best way to profit from the future rise in rates. A investor who has years to wait has a definite opportunity here.

Buying options is not a sure bet as there is timing involved. Shorting TLT is an attractive idea. Selling long term options is another one (for those who can write options). TBT is not a good idea for the long term as it is a 2X ETF (we have posted repeatedly here warning against leveraged ETFs).

As usual, it all depends on the investor's timeframe.

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