"During the 2008 financial crisis, TLT soared by over 30% during the window when equity markets were collapsing. While the S&P 500 lost roughly half its value, TLT moved the other way, driven by the Fed slashing rates toward zero and a global rush into U.S. government debt."
"As markets went into freefall in early 2020, investors flooded into safe-haven assets, and the Fed slashed rates back to zero. These are the exact conditions TLT is designed to capitalize on."
iShares 20+ Year Treasury Bond ETF (TLT) tracks long-duration U.S. government bonds, which behave differently during recessions. Investors seek safe-haven assets like Treasuries, increasing demand and prices. Simultaneously, the Federal Reserve cuts interest rates, causing bond prices to rise inversely. TLT benefits from both trends due to its long duration. Historical data shows TLT gained over 30% during the 2008 financial crisis while equities plummeted. Similar patterns occurred during the COVID-19 crash, reinforcing TLT's anti-recession characteristics.
Read at 24/7 Wall St.
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