If you own a bond fund, you’re likely losing money. Perhaps a lot of money.
As interest rates rise, the value of bonds fall. Since hitting a peak in July, the 20 year Treasury Bond Fund TLT is down 17%. This is a surprise to many investors because they consider bonds to be “safe”.
If the Trump stock market rally continues, watch for bonds to fall further. A key support level for TLT is 112. If TLT falls below that level it is likely to mimic the declines of 2013, possibly declining another 15-20%.
Be cautious, bond funds are NOT SAFE!
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