To The Moon

Treasury bond ETFs form the cornerstone of my investment portfolio, reflecting my focus on a balanced approach combining income generation and potential price appreciation. My holdings include TLT (iShares 20+ Year Treasury Bond ETF) and TLH (iShares 10-20 Year Treasury Bond ETF) on Tiger Brokers, as well as TLT and TMF (Direxion Daily 20+ Year Treasury Bull 3X Shares) on Webull, and TMF on USmarts. Yesterday, I expanded my position further by purchasing 98 additional shares of TLT on Webull at a price of $87.29 per share. Notably, TLT's 52-week range is $86.98 to $101.64, and it closed at $87.57 yesterday, highlighting its proximity to the lower end of the range.

iShares 20+ Year Treasury Bond ETF (TLT)

Why Treasury Bond ETFs Are Key in My Strategy?

1. Regular Dividend Income: Treasury bond ETFs provide me with a steady stream of income through regular dividends. These dividends are crucial in maintaining liquidity in my portfolio and supporting my broader financial goals, including reinvestment opportunities and covering personal expenses.

2. Undervalued Price Opportunity: At current price levels, particularly given TLT's 52-week range, I believe Treasury bond ETFs are undervalued. With TLT trading near its 52-week low, the downside risk appears limited compared to the potential for price appreciation, especially as economic conditions evolve.

3. Interest Rate Expectations: The macroeconomic backdrop suggests that interest rates may decrease this year, even if not as sharply as some investors might prefer. Lower interest rates typically boost the value of Treasury bond ETFs, as their fixed payments become more attractive compared to newer, lower-yielding issues.

4. Economic and Political Context: Although there are uncertainties about Donald Trump's potential presidency and the inflationary impact of his policies, the market's expectation for rate cuts remains strong. Even if the Federal Reserve maintains higher rates for longer than anticipated, long-term Treasury bonds often provide stability during economic downturns or periods of market volatility.

5. Portfolio Diversification: Treasury bond ETFs serve as a hedge against equity market risk. Their negative or low correlation with stocks ensures that they can offset potential losses in my equity holdings during downturns, creating a more resilient portfolio.

Recent Moves and Outlook

My recent purchase of TLT at $87.29 reflects my confidence in its current valuation. With TLT trading near the 52-week low of $86.98 and far below its high of $101.64, the potential for price recovery appears favorable. The likelihood of economic deceleration and eventual interest rate cuts could provide both income stability and capital gains in the coming quarters. Additionally, as Treasury bond ETFs are backed by the U.S. government, they represent one of the safest assets available, reinforcing my portfolio's foundation.

Cautionary Considerations

While optimistic, I remain cautious about the following factors:

• Uncertainty in Federal Reserve Policy: If inflation persists longer than expected, the Fed may delay rate cuts or even raise rates further.

• Political Risks: The economic policies of the next U.S. administration could shift market dynamics, potentially affecting bond yields and valuations.

• Duration Risk: Long-term Treasury ETFs like TLT and TMF are more sensitive to interest rate changes, which could lead to price volatility in the short term.

Conclusion

Treasury bond ETFs remain a vital component of my portfolio, balancing income generation with long-term growth potential. By carefully monitoring macroeconomic indicators and market conditions, I aim to capitalize on opportunities in this asset class while managing associated risks.