I did not invent the barbell strategy. At the start of the year, I simply offered readers a glimpse into the way that I would be managing ETF assets in the late-stage bull market.

First, let me take you back to January when I explained that long-term rates would fall, not rise. The contrarian call had been met with ridicule at the time. Allocate a percentage of portfolio assets to long-term investment grade debt? “Ludicrous!” cried fans of ProShares Ultra-Short 20+ Year Treasury (TBT). “Rates can only go one direction. Up!”

However, there were thousands of folks who did appreciate my premise. Specifically, foreign governments and institutional money would be clamoring for a dwindling supply of intermediate- and longer-term U.S. bonds. Then, mix in the uncertainty of the Federal Reserve’s exit from quantitative easing (QE) during a period of extraordinary weakness in the global economy. Suddenly, safety seekers would be contributing to the demand side of the equation. Last, but certainly not least, U.S. Treasuries were (and still are) relatively attractive when compared to the yield on the debt of less stable countries.

My prescription in 2014? Exchange-traded trackers like Vanguard Long-Term Bond (BLV), Vanguard Extended Duration (EDV) and PIMCO 25+ Year Zero Coupon (ZROZ). Those who valued my analysis expressed gratitude in comments, e-mails and hypertext links back to my articles. In contrast, when bonds pulled back sharply two weeks ago, a belligerent stalker of financial authors sarcastically admonished my choice of extended duration treasury bonds.

It is important to note that the long-term bond holdings were not my solitary conviction. More accurately, they have always been a component of a barbell approach.

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