Fri 2:52PM EDT [$$] TLT: A Gauge of Market Sentimentat TheStreet.com
Looking for a way to gauge investor uncertainty and economic trends? Keep an eye on the iShares Barclays 20+ Year Treasury Bond ETF, which is climbing the wall of worry. TLT, which tracks low-risk, low-return, extremely long-term Treasury bonds, is an excellent indicator of how concerned market participants are becoming. TLT has gained 20.9% year to date, more than 5% in the one-week period ending Aug. 19 alone. TLT is a good barometer of fear, as the fund's price tends to climb in times of market turmoil, as investors run for cover. What's the flip side? TLT and its underlying index are highly exposed to interest-rate and inflation risk. If inflation or the real rate of return demanded by the market rises, the price on this fund will drop until the yield is high enough to reflect current market sentiment. Some ETFs are great to own...