iShares 20+ Year Treasury Bond ETF (TLT-Q)

ZFL is Canadian long bonds. TLT is made up of Treasury long bonds. Both great vehicles in the context of trading and looking out for a recession. We're in a trading range for interest rates in general for the next few years. Bound on one end by colossal amounts of government debt, and on the other side inflation is driving rates higher as well. And all with the prospect of a slower global economy.

If you think there's going to be a harder economic landing, federal bonds will outperform provincial bonds as a rule of thumb. But you'll get a bit more yield in a provincial bond in the long run. 

Most recently he's been adding duration and maxing out long-bond exposure. After the markets rally a bit, he's trimming that back. He wouldn't say buy and hold. If you were to see the US 10-year get back to 4.75%, and the US long bond get back to 5%, those are great opportunities for longer-term trades.

He doesn't like the stock market, so he's looking for alternatives. This is one. Likes that there's the possibility of rates coming down in the US. His downside sell level is ~$86. First target is $95, second target is $100. Not correlated to stocks, so it will march to its own drumbeat (inflation, USD, and interest rate policy). Small dividend.

Must look at total return. Those that focus on the yield and don't understand the return are doomed to risk. Just hold TLT or ZTL -- US bonds at the long end of the treasury curve -- and don't go chasing yield.

In his aggressive strategy. Doing nothing, struggling. In a longer-term base. He'd buy it for his conservative strategy if it broke out. If breaks below $92 and stays for a few days, he'll sell. His position is only 2%.

It is near its support zone so he has it as a potential trade in their aggressive account. He has a tight stop at $91.75 so if it goes below that for three or more days then he will sell at a 2 or 3% loss. The idea is that in the long term bonds will go up.

Has sold shares. Technical resistance around $100 suggested a sale. Might buying again around $95. 

When you buy any bond fund or ETF, you have persistent rate risk. Very different from buying a bond that matures. If you want to take advantage of falling yields, you have to own long-term bonds that don't mature for a long, long time. So if interest rates fall, you get the advantage of that.

For a bet on falling interest rates, long bonds are the way to do it. ZFL contains long-term federal government bonds in Canada. In the US, use TLT. Best bang for your buck, but highly volatile and highly risky. Long bonds right now are facing a tremendous wall of supply, and he's not sure they're going to fall that much in price. He's quite cautious on long bonds right now.

TLT, he believes, is a leveraged play on the bond market and he wouldn't do that. 

When and if the Feds ease, bonds will move. Fell like a brick when rates went up, now in a period of easing in Canada and potential easing in US. Won't happen overnight, but a relatively safe trade, and you'll earn a bit of interest as you wait.

Chart shows a symmetrical triangle -- higher lows, but lower highs. A consolidation. When it breaks out, will almost certainly be to the upside, especially after a mega-downtrend. And you'll probably get a good move, which may take a year or just 3 months.

Tends to go in the opposite direction of interest rates. As treasury yields go up it tends to go down, and vice versa. When Fed started to talk about pivoting, had a nice run. Since January, Fed's been walking all that back with its "higher for longer" and reducing rate cuts to one, so TLT's come off a bit. 

Encouraging that it's started to pick up in last few weeks. Looking around the world, seems that rates are not going higher anytime soon. Another factor is how aggressively will Fed cut? Cut once or twice and stop, or keep going?

If the US Fed doesn't cut rates until 2025, then sell this now. Inflation won't fall to 2% in a straight line, and he expects a delay in cuts.

He's not bullish on 20-year bonds, ever. And he doesn't like ETFs to start with. If you want to speculate on interest rates falling, then this is a good ETF to buy. But he thinks you're better served with investments of 5 years and under, where there's better rate of return potential with less chance of loss.

If we had a recession tomorrow and rates went to 0%, this ETF would rally substantially.

Long bonds like this one have been in steep decline, some 40-50%, from the moment that rates started to increase. Fortress-like, ultra-long-term bonds that you expect to be the ballast in your portfolio. Yields are a bit higher than before, but we're still talking 3-4%. On such a price decline, it's cold comfort.