U.S. Treasury bonds are reaping the benefit of being a safe-haven investment.  With volatile markets and escalating crisis’ overseas, the treasury-related exchange traded funds (ETFs) are moving forward.

Treasury prices jumped sharply in trading this morning after an announcement that the situation at a Japan nuclear plant is out of control and there cold be possible catastrophic events sooner rather than later.  Min Zeng of The Wall Street Journal reports this forced the Federal Reserve to delay a round of bond buying by an hour.

There is concern about the strength of global growth with the spreading turmoil in the Middle East and the disaster in Japan.  But the Fed has not changed its assessment of the economy.  On Tuesday, they said the economy is on a firmer footing, while acknowledging higher oil prices pushed inflation.  Today’s economic reports indicated the housing market continues to be missing from economic growth.

Until there is more certainty regarding Japan and the Middle East, it’s likely investors will turn to Treasuries.  While there is no crystal ball to tell us when the time is right for a specific investment, having a strategy for your investments is important, especially one with an exit strategy.  We use the 200-day moving average to guide us when to invest and when to sell. [ETF Trend Following Plan].

ETFs which invest in Treasuries include:

  • iShares Barclays 20 Year Treasury Bond Fund (NYSEArca: TLT)
  • PIMCO 7-15 Year U.S. Treasury Index (NYSEArca: TENZ)
  • Vanguard Extended Duration Treasury ETF (NYSEArca: EDV)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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