If there’s no strategy to profitably bet on long-term real interest rates increasing, you can’t infer timelines from real interest rates. I think the investment strategies outlined in this post don’t work, and I don’t know if there’s a strategy that works.
I want to caution against the specific trading strategies suggested in this post:
The short ETFs TBF, TBT, and TTT have 1% fees. In addition, short or levered ETFs rebalance frequently, and are known to have large hidden fees of 1-4% per year. Short ETFs are not suitable for long-term holding unless you’re excited about contributing towards Jane Street salaries.
Even without these fees, the investments would not be a slam dunk compared to buying stocks, as pointed out here. But the fees really make this look very unattractive.
If there’s no strategy to profitably bet on long-term real interest rates increasing, you can’t infer timelines from real interest rates. I think the investment strategies outlined in this post don’t work, and I don’t know if there’s a strategy that works.
I want to caution against the specific trading strategies suggested in this post:
Shorting LTPZ will cost you 7% per year in borrow fees.
The short ETFs TBF, TBT, and TTT have 1% fees. In addition, short or levered ETFs rebalance frequently, and are known to have large hidden fees of 1-4% per year. Short ETFs are not suitable for long-term holding unless you’re excited about contributing towards Jane Street salaries.
Even without these fees, the investments would not be a slam dunk compared to buying stocks, as pointed out here. But the fees really make this look very unattractive.
(Shorting TLT seems a reasonably affordable way to implement this strategy I guess, though you’re only going short nominal interest rates.)