Should You Invest In Bonds? [iShares Barclays 20+ Yr Treas.Bond (ETF), iShares iBoxx $ High Yid Corp Bond (ETF)]

If you are thinking about shorting it, I’d say do the same thing I did with the 30-year, which is to set a few stop losses in place.

Another way to go is wait and see if we get a bounce, which would allow you to short at a higher price and have less risk to deal with.

As far as a secular move where the overall trend is down, I’m not sure we are there yet, either.

There are a few other things to consider. Right now, levered funds are at an historic high as far as having the largest short positions. Some see this as either the “smart money” believing bonds are due to fall, or a contrarian indicator. Over in Europe, there is growing concern about sovereign debt in countries such as Greece. A crisis in other nations, as far as debt is concerned, could drive investors into the perceived safety of U.S. bonds. That would push the long bond higher, and give you an opportunity to short.

This article is brought to you courtesy of Lawrence Meyers from Wyatt Investment Research.

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