Now, listen closely to how this works, because I'm only going to write it once: This investment (TBT) seeks daily investment results that correspond to two times the inverse (-2x) of the daily performance of the Barclays Capital U.S. 20+ Year Treasury Bond Index. TBT purchases derivatives that its advisers believe, in combination, should have similar daily return characteristics as two times the inverse (-2x) of the daily return of the index. And this index includes all publicly traded U.S. Treasury securities that have remaining maturities of at least 20 years. In this instance, if interest rates rose (meaning fixed-rate U.S. Treasury securities would fall in price), the market value of TBT would rise, and you'd be profitable. However, if interest rates fell (meaning fixed-rate U.S. Treasury securities would rise in price), the market value of TBT would fall, and you'd lose money. Cool beans! This certainly would be easier than borrowing U.S. Treasury securities and then repurchasing them.
TBT trades on the Big Board just like a stock, and because a growing number of investors share your feelings, this ETF recently has experienced some big cash inflows. Its 52-week range is a low of $56.32 and a high of $77.40, and the current $65.50 price could be an entry point.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com.
The 8 Best Natural Gas Stocks. Find Out How to Invest.