The logic is pretty simple–I think the rise in yields on Treasuries and the anticipated rise in interest rates from the Federal Reserve that sent the Dow Jones Industrial Average down more than 650 points today isn’t over. There’s just too much pushing bond yields higher (and bond prices lower) over the next few months: the deadlock in Congress over funding the government and a new budget, the more than $400 billion in new bonds the Treasury has to sell this year, weakness in the dollar, the debt ceiling battle. So I think we’ll see yields on the 10-year Treasury, now near 2.85% creep toward 3.00% as the year goes on.
To profit from that–and to hedge your portfolio holdings of assets such as U.S. stocks–I added the ProShares Short 7-10 Year Treasury ETF (TBX) to my Volatility Portfolio.
You can read all about this buy on my subscription site JubakAm.com. And right now, in honor of Groundhog’s Day (six more weeks of winter by the way) you can get 20% off a subscription to this site and to the Volatility Portfolio that returned 53% in 2017 and where I added this hedge today. You got on email on this offer yesterday. But if you can’t find it, just go to the JubakAM.com site where you can read my performance report for this portfolio in 2017 (for free) and then sign up for my Groundhog’s Day offer.
