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Author: TMFMurph Big gold star, 5000 posts Old School Fool Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35623  
Subject: Best Way to Profit from a Rate Decline? Date: 11/19/2006 11:29 AM
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Hi All!

I've been around TMF for more than three years, but I don't know squat about bonds. On the premise that the only dumb question is the one that goes unasked, here's one for you:

If I'm willing to make a "bet" ( and let's face it, that's what it is! ) that interest rates on longer-term treasuries, etc, will go down over the next 2-5 years ( say from the mid/high-4%'s to the mid/low 3%'s ), what is the best way to make said bet ( i.e. highest return/lowest cost )?

Let's face it, a 1-point decline from 4.8 to 3.8 is a whole lot greater in impact that a 1-point decline from 7.8 to 6.8...thus my interest ( pardon the pun). ;-)

Should I be looking at certain bond funds, individual T-bonds or what?

Thanks much!
( who is almost totally ignorant about the interest rate betting alternatives, but who is willing to learn....and who understands that this is speculative in nature, and thus belongs in Murph's Mad Money portfolio, not the core portfolio ) ;-)

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