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Bond Bubble Revisited

On December 11, 2008, I wrote a post on How to Profit if The Bond Bubble Bursts which you can revisit by clicking here. Since then, long term US Treasury Bonds have increased by more than 1% and indications are that rates will go higher as the government needs to raise several trillions of dollars over the next year and the market is having trouble digesting the vast quantity required.

I had indicated that one way to profit from this would be to buy the Horizon Betapro 30 year US Treasury Bear ETF that trades on the TSV under the symbol HTD. 

This ETF provides 2 times the daily movement up or down of the underlying investment.  Since the last commentary was written on this subject, the ETF has performed well closing today at $15.15, well above its December 11th close of $13.47, a 12.5% return over the last two months.

The 52 week high was over $20 and I wouldn’t be surprised to see it climb back to those levels by the end of the year. What are your thoughts? Do you think long term bond rates in the US will climb or drop close to all time lows?


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