iShares Barclays 20+ Year Treasury Bond Fund (ET (AMEX:TLT)

The U.S. is in for a period of rising interest rates over the next 2 years. The Fed cannot continue to feed the banking system with liquidity. Treasury yields are going to go up and with TLT will decline.

Who would invest in this? Low rate locked in for 20 years while the government is running the printing presses to cover up massive problems in the economy? No thanks.

Fixed income market is in a bubble, the yields are too low and do not reflect the reality of rising worldwide inflation. Get ready for a long term bear market in bonds

Inflation will make long term US treasuries worthless

Treasury Bond bear market, so your bond money is better off in convertible bonds (try Fidelity) with the stock bull market on.

Bonds are priced to perfection. The treasury is going to issue its way out of this crisis, which means more bonds. More bonds = lower price. Short bonds.

Every time the stock market goes down this ETF goes up. This has a beta of -.33, the stock market goes down, and this stock is pumping up. This ETF is a bull if the market is headed lower. Which I think is happening in the next few months. Just yesterday the Dow was down 300. This ETF was up immediately at a 1.6% gain. Not sure why people are voting down on this, as the FED will go once again and cut more rates. This is a good 4 - 6 month ETF I think it will go to 100 very soon, as the market dips even more. I think this is just a warmup to a real rush to bonds as the FED will cut rates even more in the near term.

With all these dollars sloshing around inflation and long interest rates should be going up / and bond prices going down.

No way this will outperform the S&P in the long run.

I find it hard to believe that in any five year stretch that a low yield 20 year bond that has expenses taken out of it's returns can outperform the stock market that has fewer returns taken out of it. If the interest rates stay the same, the fund produces over 4 percent returns. If interest rates drop, they cannot drop drastically, and if they rise (as they probably should long term). The fund will start producing higher yields for new investors, but the values for the existing shareholders will be reduced to bring them back to the original YTM close to the date they purchased into the fund. The only way that SPY can UNDERPERFORM TLT is if the S&P returns under 4% for the next 5 years.

IIOTTMCO

Throughout the yield scare that recently roiled the market, the major indexes never fell that far from their heights. A bond ETF might be nice to hold for its yield, but I doubt the performance of its market price will exceed that of the SPY.

I expect interest rates to rise as foreigners diversify their holdings out of our treasuries and into commodities, equities or euro-based bonds. This will probably happen slowly, since they don't want to tank the stock and treasuries markets and weaken the dollar more than it already is. However, with our export deficit and budget deficits as high as they are, I believe the dollar must continue to weaken. If interest rates rise faster than the dollar weakens, the outflow will slow down, but I think the diversification out of treasuries will be inexorable, and hence interest rates should go up, at least to 6% within a year and possibly as high as 7%. Above that level, the economy would tank hard, and that is not in anybody's interest (so to speak), so all parties will seek to avoid it -- unless a bloc of other countries unite against us economically, in which case all bets are off, but I think that's unlikely for now. Therefore, TLT should gradually go down. I might consider buying six month or longer puts, with the strategy of selling after four months maximum, with sliding stop losses to protect against anomalous dollar strengthenings or a surprise rate cut by the Fed.

The fixed-income market, for a long time has lagged the exchange-traded fund boom, but can project a turnaround now, as ETF providers are gearing up to wrap every corner of the bond market. Owning long-dated treasury bond funds makes sense for long-term investor who tries to avoid the risks and complexities of corporate securities. On the same line, ishares Lehman 20+ Treasury Bond (TLT) attempts to copy the behavior of Lehman Brothers 20+ Year Treasury Bond Index and owns about a dozen of long-term treasury issues.

Treasury bonds are issued by the U.S. government; investors need not worry about credit risk, but interest-rate risk is a major concern. In the last few years, interest rates have gone up considerably, leading to high yields on long-term bonds, thereby causing investors some meaningful losses. In the current scenario, where equities are possibly topping, bonds are at their tradable low with a 10-year note being trading at 4.9 percent as of January 2007. Nonetheless, the yield curve is still inverted which historically has been indicative of an approaching economic slowdown or recession, which can make the rates fall to about 4 percent in the coming months.

Endorsing the same, the fund has always lagged behind its benchmark index, posting a return of meager 0.85% for the year 2006. Though, its 0.15% expense ratio is lowest in the long-term group, the interest rate volatility tends to keep investors at bay. With an average effective duration of 13.81 years, the bond fund looks more risky, as longer-term bonds react with more volatility to interest-rate changes than do shorter term issues. Given these reservations, the fund does not seem fit for the first priority.

TLT - Lehman 20+ Year Treasury Bond Fund - Since the Bimcy30 generates points by either out-performing or under-performing the S&P500 index, I can say with some sort of confidence that the 20-year treasury bill will NOT outperform the market this year. With commodites booming and other currencies appreciating against the dollar, bond prices will have to fall (therefore yields to increase) to try to attract some purchasing power back into the dollar. This is a slow-moving trend and should be played out through the end of the year. - JB

umm ... look at the yield curve

Market pullsback by Oct. 1st , Bonds up

bonds loose to stocks, longterm