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Interest rate gambling

Started by pkamm, 05/13/2003 08:40PM
Posted 05/13/2003 08:40PM Opening Post
Anyone here into inverse funds? Dabble just a little now and then. Don't feel comfortable about the stock market's direction right now but it seems to me now that the long bond has rallied into never-never land.

Just bought some of the Rydex Juno inverse treasury fund (blue line, here plotted against the opposite bond fund, the green line) -- essentially this is placing a bet that interest rates will rise.

If I'm right and interest rates rise I'll make money. If I'm wrong and the long rates crash, I'll lose money but can more than make up the loss by refinancing my mortgage with the unexpectedly low rates. How's that for a hedging strategy? :-)

Attached Image:

pkamm's attachment for post 5982
Posted 05/13/2003 09:07PM #1
what is the time line on the chart?