How's this for a risk free investment? - Aussie Stock Forums

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    Default How's this for a risk free investment?

    Hi guys,

    Just kidding but I wanted your attention. Can we talk about NYSE:RYJUX?

    The investment seeks total return, before expenses and costs, that inversely correlates to the price movements of the 30-year Treasury bond. The fund normally invests in financial instruments with economic characteristics that should perform opposite to fixed income securities issued by the U.S. government. It is a nondiversified master feeder fund.
    Obviously capital would have been best deployed into this instrument during January, but hindsight 2020 and all that.

    The 30y bond is used heavily to price domestic home-loan interest rates in the US. Interest rates cannot go any lower, and this must be supported by the Fed or risk bringing massive defaults to the housing market again.

    Since we have reached this stalemate between the Fed buying and everyone else selling I suggest this might be a good opportunity to add some capital here, with an eye to averaging in if bond-market deflation expectations push 30y yields lower and a break down in this price.

    Buying this instrument is essentially a bet that interest rates will rise at some point. We can invest capital here without too much fear because 30y bond prices are off their all time highs (but still verrrry high), therefore yields cannot be depressed much further.

    Second chart is 30y yield to demonstrate this instrument tracks yield very well (remember, capital down yield up means inflation expectations in the bondmarket).

    Ok guys, I am going bush tomorrow until Monday to DJ at a big party all weekend! Very excited to be out of the house and hugging some trees as I have been sitting here trading and investing and researching and pestering you all since Uni finished! I am sure you will be happy to see some cess in my incessant posting !
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    Disclosure: Long cash, gold, stocks.

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