What is the best way to bet on rate increase?

[mrc]

Hi,


If one is a believer that long-term rates would go up in the longterm, what is the best way to invest to make money using bond investment options.
Put calls could be an option on something like TLT, but are there any ETFs or other choices available. I came across these etfdb.com/etfdb-category/inverse-bonds/

I do not mean that I would like to invest, but want to have an idea of such investment options available to common investors.


Thanks,
Mrc

[Chahta]

At some point rates have to increase. Makes sense when it happens. They can’t be any riskier than EDV is.

[FD1000]

mrc ,
Yes, these are options that are available for you. I would not use them because
1) Predicting rates long term is very difficult.
2) Gundlach, the "king of bonds" predicted in 2018 that the 10 year treasury will be at 6% by 2021(link). The king lost his clothes.
If you listened to him, you would lose in the last 3 years(chart) -27% while TLT made 31%. That's "only" 58% difference.

[Deleted]

I have no clue.

But shouldn't Tech and Banks stocks do better once rates go up. Tech has so much cash and high rates really do not impact them much. Banks because they can make money on spread.

Capital intensive industries, high debt companies. LT bonds and junk debt should do bad.

Treasuries, hard to say, once rates go up, international funds may flow to US treasuries.

[roi2020]

Predicting future interest rates is difficult.
Many market professionals' forecasts were wrong after the Global Financial Crisis.
Bank-loan funds pay a floating-rate coupon which can offset rising interest rates.
However, credit risk exists since most bank loans are issued by companies rated below investment-grade.