15+ Years Worth of Gains Gone - TLT ETF

Financial markets prove people wrong over and over. I guess that's the point - trick as many people as possible into taking their money.

For example, investing in Treasury Bonds has always been seen as a relatively safe & stable way to grow wealth. Some people have found that ETFs in Treasuries offer that.


Well, the chart above sort of changes that perspective, eh?

While the rest of my post will explain the basics, like what happened and what we can learn, I actually do think this might be an interesting bounce play. Thus, I am watching it for a swing trade off the lows! Support line, anyone? Let's see.

Now onward...

The iShares 20+ Year Treasury Bond ETF ( TLT ) has been a go-to choice to gain exposure to Treasury bonds over many years now. However, recent events have erased nearly 15 years worth of gains.

And it did not take long at all.

The culprit behind TLT's recent woes is the rise in interest rates. When interest rates go up, the value of existing bonds tends to go down. As the Federal Reserve decided to increase rates to combat inflation, TLT investors found themselves holding the bag.

The good news is that they'll still collect a good dividend over time, but for now, that's damage done to the core principle.

Want to hear a joke? Okay...

Why did the TLT ETF go to therapy?
Because it couldn't handle its ups and downs anymore!

Jokes aside, the TLT turmoil serves as a stark reminder that even seemingly safe investments can turn sour quickly.

Here are some key takeaways:

Interest Rate Risk: As we've seen with TLT, interest rate movements can have a significant impact on bond investments. When rates rise, bond prices fall.

Market Uncertainty: The markets are inherently uncertain.


Risk Management: Setting stop-loss orders or regularly rebalancing your portfolio can help mitigate losses.


Let's see what happens next.

I have NO position currently.