Google Answers Logo
View Question
Q: Bear Market in Bonds ( Answered 4 out of 5 stars,   1 Comment )
Subject: Bear Market in Bonds
Category: Business and Money > Finance
Asked by: gollum9701-ga
List Price: $15.00
Posted: 14 Nov 2005 18:49 PST
Expires: 14 Dec 2005 18:49 PST
Question ID: 593024
I believe that prices of bonds are going to fall. Is there a mechanism
or vehicle for me as a retail investor to invest on my belief?
Subject: Re: Bear Market in Bonds
Answered By: juggler-ga on 14 Nov 2005 19:24 PST
Rated:4 out of 5 stars

First of all, I must note, as always, that Google Answers provides
general information, not professional investment advice.  If you need
professional investment advice, you should contact a qualified
investment advisor or financial planner.


Yes, there are several ways you as a retail investor can profit from
falling bond prices.  These strategies include:
(1) short-selling bonds;
(2) short-selling exchange traded funds (ETFS) that track various bond indexes;
(3) buying mutual funds that are designed to profit from falling bond prices;
(4) buying Treasury Inflation-Protected Securities (TIPS).


If you have high tolerance for risk, think about selling bonds short.
This strategy involves selling borrowed bonds in a margin account in
the hope that their prices will fall. You can also short any of six
exchange traded funds (ETFS), called iShares, that track various bond
indexes. Since long-term bonds are the most volatile, the 7-to-10 year
and 20-plus year Treasury bond ETFs offer the greatest opportunity for
short-selling gains.
 The risk, of course, is that if bonds rally, you'll have to replace
your borrowed securities at a higher price. You also must reimburse
the lender for any interest paid out while you hold the short
position. You may be liable for other fees, too.
 Two no-load mutual funds also offer a chance to profit from falling
bond prices: Rydex Juno (RYJUX ) and ProFunds Rising Rates
Opportunity. But unlike short-selling, you don't need a margin
account, and you won't owe lenders any interest."
BusinessWeek: Higher Rates: A Survival Kit

"Betting against bonds"

"How to Short T Bonds"

"Inverse Bond Funds - Betting Bond Prices Go Lower"


Here are the websites of some of the specific investment ideas
mentioned in the articles above:

"Rising Rates Opportunity ProFund "

"Potomac ContraBond Fund (PCBDX)"

"Rydex Juno Fund"

"Treasury Inflation-Protected Securities"

search strategy:
"from falling bond prices" 

I hope this helps.  Good luck!
gollum9701-ga rated this answer:4 out of 5 stars
Buying into bond funds is quite helpful. Shorting Treasury Bonds I
don't think is generally practible for a retail investor.

Subject: Re: Bear Market in Bonds
From: paulft-ga on 26 Nov 2005 21:11 PST
Rydex Juno, RYJCX, is a short (bear) fund that shorts long bonds
(using futures as a trading vehical.) My source, shows the correcloation between RYJCX and
long bonds is 98% percent or more. The major attraction is that using
RYJCX, you can short bonds in a retirement account.

Otherwise, you can short SHY,TLT,IEF,AGG,TIP . .  . all excahnge traded bond funds.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy