The Fed’s recent decision to buy $600 billion in Treasury bonds gave the stock market at least a short-term boost and opened the path for investors to profit outside of buying equities. Yesterday’s market retreat shows why you may want to avoid having too many of your investments tied up in stocks. Indeed, yesterday’s trading led to drops of 1.59% in the Dow Jones Industrial Average, 1.75% in the NASDAQ and 1.62% in the S&P 500.

If you want an alternative to equities, consider the ProShares Short 20+ Year Treasury (TBF), a rising-interest rate exchange-traded fund (ETF). The fund seeks the inverse performance of the long end of the Treasury bond market and lets investors profit when bond yields climb. I have recommended the fund in my High Monthly Income and Successful Investing investment newsletters, as well as in my weekly ETF Trader service. I am pleased to report that, as of the close of trading yesterday, all of those positions were profitable.

Here are several reasons why you may want to own TBF right now. First, the Fed’s quantitative-easing (QE2) decision to buy $600 billion in bonds should be good news for a fund that shorts Treasuries. Second, interest rates have begun to rise since the Fed’s QE2 announcement. Finally, the Fed’s continuing efforts to stimulate the economy have chipped away at the value of the U.S. dollar versus rival foreign currencies.

As a short fund, TBF is a way for you to bet against long-term Treasuries. TBF specifically seeks daily investment results, before fees and expenses and interest income earned on cash and financial instruments, that correspond to the opposite of the daily performance of the Barclays Capital 20+ Year U.S. Treasury Index. The index includes all publicly issued, U.S. Treasury securities that have a remaining maturity greater than 20 years and are fixed-rate, non-convertible, investment grade and denominated in U.S. dollars.

The chart below shows that TBF has enjoyed a big jump since early October but has pulled back in recent days. If you think the dip is a short-term reversal that simply offers a reduced price to let you climb aboard the next wave that will take TBF higher, you may want to invest in this ETF in the near future.

For advice about which ETFs to buy and to sell, I urge you to sign up for my ETF Trader service by clicking here. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to contact me if you have one. To send your question to me, simply click here. You may just see your question answered in a future ETF Talk.