Long duration treasury ETF's have long been touted as hedges against risk and inflation. However, treasury prices and rates have an inverse relationship. When the US Treasury issues new bonds during a rate hiking cycle, it depresses the prices of the long duration treasuries within these ETFs. Conversely, when rates reach their peak and subsequently start to decline, these ETFs will hold treasuries with higher rates than the newly issued ones. This explains why we see TLT price increasing in a low rate environment and decreasing in a rising rate environment.
If we are near the conclusion of this rate hiking cycle we should see a little more consolidation in TLT, followed by price increase. I have been and will continue to add to my position anytime we are close to $100 during this consolidation. I'll begin to take profit $112-114 and then re-evaluation market conditions.
If we are near the conclusion of this rate hiking cycle we should see a little more consolidation in TLT, followed by price increase. I have been and will continue to add to my position anytime we are close to $100 during this consolidation. I'll begin to take profit $112-114 and then re-evaluation market conditions.
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Declinazione di responsabilità
Le informazioni ed i contenuti pubblicati non costituiscono in alcun modo una sollecitazione ad investire o ad operare nei mercati finanziari. Non sono inoltre fornite o supportate da TradingView. Maggiori dettagli nelle Condizioni d'uso.