On 11/10, I did the post “Cracks showing up in bonds.” (see post here) Reflecting weakness in 3 types of bonds. Now you can add MORE BONDS TO THE WEAK LIST!
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2008 was a challenge for most, because it was hard to find a place to hide… The few bright spots in 2008 to own were Cash, U.S. government bonds and the U.S. Dollar, since stocks and commodities pretty much got run over.
Personally I don’t define risk as markets going down…I look at risk as “how many asset classes go down AT THE SAME TIME!” I am not attempting to be right or wrong on this subject, just attempting to shed light that all of a sudden we are experiencing “risk in this form, AGAIN!!!” (meaning very few places to hide).
I hope it is fun for you and others! Thanks for your great questions! It is better for me to answer a question like you had, versus my BS!
Thanks for the explanation, Chris. And Thanks for making it fun!
Per bonds…I did take “pocket change gains” on TBF and actually suggested to buy TLT last night. Keep in mind all bonds don’t act the same. Over the past 6 weeks I have been shorting govt bonds (TBF) and long high yield mutual bond FUNDS, at the SAME TIME and this has worked for both positions.
If a rally happens to take place in TLT, I will be looking for a pattern to “sell into” and buy back TBF. If TLT starts to break down here, I will cover the position and re-establish TBF again. Just keep in mind, all bonds don’t act the same. We could see the opposite of what I have suggested recently, per junk could start to fall in price and TLT rally…. stay tuned. Isn’t this fun! 😉
Chris, what is the best way to profit from this “bond breakdown”. TBF/TBT? You harvested TBF already. Are you suggesting getting back in?