Here are some of the many ways to take advantage of rising interest rates:
1. Short-term Treasuries. For your keep-safe funds, just earn the higher yields as they become available by sticking with short-term Treasury bills or a T-bill only money fund.
2. Inverse bond funds. These mutual funds are designed to go up in value when interest rates rise and bond prices fall. You can buy funds that target 10-year Treasuries or 30-year bonds. Example: Rydex Juno (RYJUX).
3. Contra-dollar funds. These are mutual funds designed to go up in value when the dollar falls. Most own short-term foreign money markets or bonds, plus other investments such as gold mines.
4. Gold investments. The surge in gold ... the rise in interest rates ... and the decline in the dollar all go hand in hand. So your gold investments should continue to shine in this environment. And with options on gold investments, you can multiply your typical profit potential by three, five, even ten times.
5. Options on interest rates. These give you more leverage than you’ve ever seen or probably every will see. For just $500, you can still buy options that give you the potential to control $1,000,000. That’s effectively 2,000-to-1 leverage with strictly limited risk.
posted by Karl Ortenburg @ 10:18 PM
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