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TLT: A Contrarian Opportunity Despite Rising Inflation

Stuart Allsopp profile picture
Stuart Allsopp


  • With investor focus firmly on rising inflation and economic recovery, contrarian opportunities have emerged at the long end of the bond yield curve.
  • The iShares 20+ Year Treasury Bond ETF (TLT) now offers a reasonable yield, particularly relative to U.S. stocks, while offering protection against renewed economic weakness.
  • Rising inflation is a threat to the TLT but history has shown that even double-digit inflation rates have failed to drive up bond yields during periods of extreme government debt.
  • High levels of private sector debt also suggest that even minor increases in yields could trigger economic stresses and the Fed is likely to continue prioritizing near-term economic activity.
bond certificate
Photo by Kameleon007/iStock via Getty Images

With investors scrambling over each other to get hold of inflation hedges and participate in the economic recovery, opportunities have emerged at the long end of the yield curve. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) now offers

This article was written by

Stuart Allsopp profile picture
I am a full-time investor and owner of Icon Economics - a macro research company focussed on providing contrarian investment ideas across FX, Equities, and Fixed Income based on Austrian economic theory. Formerly Head of Financial Markets at Fitch Solutions, I have 15 years of experience investing and analysing Asian and Global markets.

Analyst’s Disclosure: I am/we are long TLT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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