This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Fretting Inflation? Buy These Funds

A sharp rise in inflation would be terrible news for the stock market and a catastophe for bondholders. But not everyone is afraid.

In fact, a select few mutual fund investors are positively cheering for it. They were heartened by Ben Bernanke's comments this week suggesting the rate remains "elevated," and by the inflationary news on unit labor costs.

They want more. Frankly, these perverse souls would love to see soaring prices and runaway interest rates. Memories of Jimmy Carter and double-digit inflation make them misty-eyed with nostalgia. They probably like to watch That '70s Show and listen to to old Bee Gees LPs.

Who are these characters?

Easy. Anyone who has a chunk of money in the (RYJUX) Rydex Inverse Government Long Bond Fund (RYJUX) -- or one of its equivalents.

These fancy-footed mutual funds use derivatives to bet against the government bond market. Their value rises and falls with long-term interest rates. And long-term interest rates rise and fall with inflation expectations.

These have been good places to be for the past couple of weeks.

The Rydex fund, which used to be called Juno, is up 5.5% over the past month.

(RRPIX) ProFunds' Rising Rates Opportunity (RRPIX) is up a little more, at 6.2%. This younger and slightly smaller fund offers more kick. It still effectively tracks the yield on 30-year government bonds but promises 125% of the inverse performance, rather than just 100%.

To watch Brett Arends video take of this column, click here .

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs