Opinions
Larry Berman CFA, CMT, CTA
iShares 20+ Year Treasury Bond ETF
TLT-Q
TRADE
Mar 17, 2025
Stock price when the opinion was issued
You might be interested:
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.
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.
As the market looks to retrace some value in the near term, TLT is a TOP PICK to hedge portfolio value. This low-MER ETF tracks long term US treasuries and offers an attractive yield. We suggest setting a stop-loss at $82, looking to achieve $104 -- upside potential of 18%. Yield 3.9%
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.
As the market struggles with US Adminstration tariffs, TLT is a TOP PICK to hedge portfolio value. This low-MER ETF tracks long term US treasuries and offers an attractive yield. We suggest maintaining a stop at $82, looking to achieve $109 -- upside potential of 18%. Yield 4.1%
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.