You can also check out PFIX, that someone mentioned. An interesting fund that reacts to interest rate changes. I haven't done a full dive into the doc but it could be a good, additional hedge.ChinchillaWhiplash wrote: ↑Thu Jun 16, 2022 12:31 pmInstead of cash, you could always use TMV in place of TMF. Would only work with rising rates but that is somewhat predictable although not 100% knowable.LeverageWBeverage wrote: ↑Thu Jun 16, 2022 8:25 am Personally, I've learned a lot from this historical scenario but definitely not going to be abandoning this strategy. Here is how I will adjust going forward.
1. Next time rates are at zero.. may be 10 years from now who knows.. I'll be in 40% cash and zero TMF. Rates can only go up from there and TMF down.
2. As things normalize I'll be 20% TMF and 20% cash because as this period shows us....who knows.
3. When stock markets are at all time highs and been there for a while I'll be back at 40-45% TMF for the negative correlation for a normal correction..(unlike this one where rates were already at zero when stock market collapsed.)
I'm still not too worried and think I can make up some of this current pain in the future. If we do get into a recession in 23 or 24 and the stock market does hit that -40% mark I'm completely comfy going 100% UPRO to make up some ground as long as inflation in under control. At that point hopefully its just the normal doom and gloom of unemployment and bad earnings.
People just have to keep in mind that everything is obvious when you already know the result. PFIX is sexy now because, YTD, it would have been great to hold it, but you can't predict when it will turn against you. If you would add it in now, will you gain much from it (unexpected rate increases incoming, still?) If we have another event where interest rates are near 0, will it work its charm again or might the US see negative interest rates in that future instance?
There is just no perfect solution to everything.