The 2nd Best Bet of the 21st Century

March 13, 2015
Bond Funds That Will Lose Big With Rising Interest Rates

In other words, get ready for falling prices for bond funds, especially those that are most sensitive to interest rates. So let’s be sure we don’t have any bond fund types that are almost certain to lose big money when the Fed starts raising rates.

Oh, we can do better than simply avoid them. Let's short the bejesus out of them, mortgaging the house if necessary! And is it necessary? Of course it is! Leaving "sure thing" investment returns on the table is foolish! If big money will most certainly be lost by owning these funds then big money will most certainly be gained by shorting them! Genius!

And do you want to know the best part? That which should fill us with the most optimism? Everyone already seems to believe in this theory! Long-term rates can only go up from here! Common knowledge! It will take so little effort on our part now that we're running with the herd! Big money! Can't lose!

Why hasn't anyone else ever thought of this? They should make some sort of anti-bond fund that goes up when bonds go down. Perhaps something easy to remember, like TBT. Think how rich people would be if a fund like that was ever introduced!

Herd prosperity, baby. That's what I'm talking about.

Let's ignore the part that assumes that rising short-term interest rates will all but guarantee that long-term rates must also rise. No point spoiling the "sure thing" party.

So, there you have it. In my opinion, it's the second best bet of the 21st century.

You didn't come here for that though. You undoubtedly want to know the best bet. My psychic advisor told me about a certain roulette table in Las Vegas. I shall be placing a very large bet at noon on April 1st. It is all but guaranteed to change my life forever! That's what she said! Can I trust her? Well, would I be paying her $3.99 per minute if I didn't? My mother didn't raise no fool! There's free advice and then there's premium advice. You get what you pay for!