 Hey everyone, this is Dan with another episode of my TMV videos. The market has not been doing well since the beginning of this year. However, there is a way to make profit in spite of the bear market. In the last couple months, I bought several batches of the ETF TMV which is up 58% since the beginning of the year. TMV is pegged to the yield of the Treasury Bounds with maturity of 20 years or more. Since interest rates will be going up for the rest of the year, I expect TMV to probably double in the next year. Let's get into the exciting details. I've been sharing some of my trades and some of the news events with my subscribers on Twitter as well as on YouTube. On Twitter, I pretty much have been updating my subscribers every 2 or 3 days or so. For example, on February 23rd, I tweeted that I bought TMV and TQQQ. In fact, after that, I've been selling and buying TQQQ several times already and as well as SQQQ which is the inverse of TQQQQ. In the meanwhile, I sold a portion of the TMV I bought February 23rd for a small profit. For the rest of the shares that I'm still keeping, they are up 38% already. Certainly that's pretty good performance. Then on March 17th, I tweeted that I bought more TMV shares and those shares are up 26% already. On April 13th, I bought more TMV shares then those shares are up 27% already because it was a dip, like an intraday dip on April 23rd. I took the opportunity to buy more TMV shares. So far, I've been very lucky with TMV and it's not all just luck. It has to do with also some of the analysis I did. I published a video about a week ago about TMV. Now this is just an update of that video and I will talk about why I'm so confident that TMV will be a good investment for me in the next few months. If you think this is interesting, I'd like to encourage you to click the like, subscribe and notification button so that you'll be notified when I publish my next video. It'll also encourage me to make more videos like this in the future. In the meanwhile, I'd like to inform you that I'm not a financial advisor. If you want to buy or sell stocks, you should make your own decisions and you should definitely consult with your financial advisors before you do so. Let's continue. We have a lot of interesting things to cover. This is a chart showing the progression of TMV and SPY as well as QQQQ since January 1st of this year. On the chart, you can see that TMV went up by an impressive 58% already whereas SPY actually went down by about 7% year-to-date and QQQ went down by more than 15% year-to-date. Finally the broad market has been bearish but TMV has been shooting up. What is TMV? TMV is an exchange-traded fund is created and supported by the RECSEON and is paid to the 20-plus-year Treasury Bounds. It's supposedly structured to approximate 300% of the performance of the ICEUS Treasury 20-plus-year bound index but ignored 300% because there's ETF leakage which is a very important thing to know about. I will explain more about that later on. The gist of it is that when the 20-year rate goes up, TMV goes up. There's a flip side of TMV or the inverse of TMV which is TMF, another ETF supported by the RECSEON and when TMV goes up then TMF goes down. There's a piece of information that we need to be aware of as we consider interest rates and TMF and TMV. On March 17th, the Federal Reserve Banks announced that they will approve the first interest rate hike in more than 3 years and the Fed on that day raised the Fed funds rate by a quarter of a percentage point. The Fed also announced that they expected to be increasing the interest rate 6 times in the rest of 2022 and the reason why they are increasing interest rates is because they consider the inflation rate to be too high at this point. Actually the inflation rate as of March 1st for all items exceed 8% which is indeed very high and we'll also talk about that in the next few minutes. So far we already talked about TMV, the ETF which I expect to be going up in the next few months then we'll talk about the 20-year Treasury rate, the Fed funds rate and the high inflation as measured by CPI. How are they related to each other? Generally speaking, because of the high inflation that compels the Fed to increase the Fed funds rate in order to control inflation or to bring down inflation. Because the Fed increases the Fed funds rate it causes all the other interest rates to go up including a 20-year Treasury rate and since TMV is designed to mimic the movement of the 20-year Treasury rate or actually 20-year and above then when the 20-year rate goes up TMV goes up. So that's the relationship among these different elements. Let's look at how the CPI, the inflation rate, the Fed funds rate and the 20-year Treasury rate interact with each other over the years. You might say since we're talking about TMV why don't we just plot the line for TMV? The only problem is that TMV has been in existence only since April of 2009. So if you want to plot TMV side by side with these three indicators the line for TMV will start from here which is just a little short line and that's why it's not easy to do a direct comparison between TMV and any one of the three indicators and therefore I'd rather look at these three indicators and see how they interact over the last 60 years and then from there we can see how is the 20-year rate related to TMV and that's how we can tie everything together. Currently, the CPI is at 8.5% if you look back in history the last time the inflation rate was this high was between 1974 and around 1980 to 83 and actually back in the 1960s the inflation rate was pretty low between 1 and 2% like what we had pretty much in the last few years and then it started to creep up when it hit finally around 8.5% inflation rate that was around 1974 so if you look down at that time and because inflation was creeping up the Fed was gradually raising interest rate to try and bring down the inflation rate because the Fed funds rate was increasing the 20-year Treasury rate was also climbing in 1974 when CPI was about 8% 20-year Treasury rate went up to about 7% at that time and then if you look at the Fed's funds rate today it's only 0.33 of a percent but back then the Fed funds rate was already at 10% and that's why a lot of people feel that the Fed is already behind its curve of trying to increase interest rate to control inflation actually a lot of people feel that the Fed should have started raising rate probably more than a year ago and then if you look at the 20-year Treasury rate currently it's only at 3.09% and back then it was already 7% back in the 1970s and 1980s as the Fed continued to increase interest rate to control inflation the Fed funds rate went as high as 21-22% and the 20-year rate went as high as 15.78% it is therefore reasonable to assume that the 20-year rate will go up from the current 3% to at least 6-7% before inflation is brought under control that means the 20-year rate will more than double from today's level that brings us to the next chart just for this year in the beginning of the year the 20-year rate was at 2.05% and as of last Friday market closing the 20-year Treasury rate was 3.09% that means the Treasury rate 20-year Treasury rate increased by 50.73% during the same period TMV went up by 83% so if the 20-year rate is going to increase another 100% from now then it will be very reasonable to assume that TMV will go up maybe 160% or more one thing we need to be aware of is that TMV like many leveraged ETFs has significant leakage what do I mean by leakage for example if you look at the 20-year rate of 2.74% it happened at least 20 times since 2012 for example April 19th 2012 the 20-year was at 2.74 and then March 24th 2017 it was back to 2.74 again and then the more recent occurrence of this rate was April 5th 2022 it was back to 2.74 again in the meanwhile if you look at the value of TMV it started out at $702.10 and then it's been coming down gradually even though the 20-year rate is the same it might go up and down but it continue to hit back to this 2.74 level in the meanwhile TMV has been going down the reason why it's leakage because it costs money and there's cost to buy and sell the financial instruments to support the TMV ETF and that's why typical to a highly leveraged ETF like this there's leakage when I calculate what's the equivalent of annual loss of TMV I turn now for example for this one between April 19th April 26th with the declining value it will be equivalent to the annual loss of 23.5% and then between April 2012 and February 7th 2017 with this decline it will be the equivalent annual loss of 20.8% and if you look down all these lines you can see that the annual loss average out to be about 19 to 20% and that's pretty substantial that means if even if the 20-year rate doesn't move it goes along a straight line flat line from now on you don't want to be holding TMV for the long term because every year you lose 20% of your value however when the 20-year rate is going up as fast as what it's been doing for example just in the matter of four months it already went up 50%. The 20% loss per year basically is more than canceled out by the appreciation or the increase in the 20-year rate or the increase in the value of TMV there's a catch though what if later on for a short period of time or maybe for several months the 20-year rate starts to decline then it's going to hurt if you hold TMV for example during 2019 pretty much overall the 20-year rate was trending downward it went from 2.83% to 2.25% throughout the year the 20-year rate went through a 24% decline and in the same period of time TMV went down by 33% so the decline of TMV was actually faster than the 20-year rate in the meanwhile remember there's an inverse twin of TMV, TMF at you bought TMF on January 2nd 2019 and sold it at the end of the year you would have gained 32.63% and that's why it's important when you are buying or selling TMV that you should your market reverses direction especially the 20-year rate starts going down then you should sell TMV quickly and switch to TMF or just get out of TMV completely and wait for the market to pick back up again and timing is the key when you start buying and selling leveraged ETFs like TMV and TMF and you don't ever want to hold these for several years at a time you want to hold them hopefully during the time you're absolutely sure that it will move in the direction that you think it's going to move and if your prediction is correct you will make a lot of profit but if the reality turns out to be opposite of what you're predicting you can be losing money quickly I need to question you about that again if you like what you've seen so far I'd like to suggest that you click the like subscribe and notification button as usual I welcome your comments questions and suggestions this is about wraps up my video for now I will chat with you again in the next few days in the meanwhile I'd like to wish you the very best of luck with your financial investments