Investor's Risky Move: Buying Worst-Performing Bonds Amid Bond Market Plunge Threatening Stock Prices
Ben Mackovak, an investor, sees an opportunity in the 30-year Treasury strip, one of the worst-performing bonds in U.S. history. He purchased the bonds at a discount and is betting on a hard landing in the U.S. and lower interest rates from the Federal Reserve within the next two years. Mackovak views this investment as a hedge to his equity exposure and believes it can potentially make a lot of money if there is a hard landing or if long-term rates go down. Despite the bond's poor performance, Mackovak sees a positive risk-free return and is willing to hold onto the trade even if the Fed hikes further.