Is the iShares 20+ Year Treasury Bond ETF (TLT) finally a better buy…?

That’s what I’d like to address with you all today.

It’s been a long time since bond yields have been racing higher, and thanks to a hawkish Fed this past week, that’s exactly what’s happening.

Which brings me to my main point of discussion: the risk of being too bearish on bonds and how quickly things can have a mean reversion on the market.

To show this, take a look at the 10-Year Treasury Yield chart.

When looking at the structural inflation we had from the 1940s all that way to the 1980s when bonds and yields went dramatically higher (2%-15%), it took us quite a while to get into a more defined and stable environment that lasted up until a year and a half ago.

Until the pandemic hit.

Ultimately, like back in the early 1980s, we’re likely to see a situation of a mean reversion in the bond yields first.

So, what does this mean for investors?

In today’s 4-minute video, I talk about why shorting bonds and the TLT ETF is risky, a possible unexpected move in bond yields and a possible buying opportunity . 

I release these weekly tips every Thursday for free, so stay tuned and stay subscribed here. 

Serge Berger

Editor of 11-Day Trader