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Defensive ETFs...
Posted on 8/5/24 at 7:40 am
Posted on 8/5/24 at 7:40 am
The markets experienced one of its worst selloffs again on Friday. After the release of some crucial economic data the market narrative shifted from a soft landing to fears over a hard landing and a recession.
The head winds were there. Job Growth reports. The volatility of the VIX. Etc.
What was concerning was not necessarily the magnitude as much as the sudden, and unexpected shift. There's a chance that interest rate cuts will happen at a much faster pace than first expected.
Long term investors continue with their discipline. DCA in solid index funds, but there is a discussion to be had about moving into some ETFs that would do better in a recession. Here are a few, some of which did well Friday and are projected to in the coming weeks:
EDV. Vanguard Extended Duration Treasury Index Fd ETF.
GOVZ iShares 25+ Year Treasury Strips Bond ETF.
TLT iShares 20+ Year Treasury Bond ETF.
The head winds were there. Job Growth reports. The volatility of the VIX. Etc.
What was concerning was not necessarily the magnitude as much as the sudden, and unexpected shift. There's a chance that interest rate cuts will happen at a much faster pace than first expected.
Long term investors continue with their discipline. DCA in solid index funds, but there is a discussion to be had about moving into some ETFs that would do better in a recession. Here are a few, some of which did well Friday and are projected to in the coming weeks:
EDV. Vanguard Extended Duration Treasury Index Fd ETF.
GOVZ iShares 25+ Year Treasury Strips Bond ETF.
TLT iShares 20+ Year Treasury Bond ETF.
This post was edited on 8/5/24 at 7:44 am
2
Posted on 8/5/24 at 7:43 am to Nole Man
My consumer staples and defense industry ETFs play that role for me.
I also keep a decent portion in a Swiss franc etf.
I also keep a decent portion in a Swiss franc etf.
Posted on 8/5/24 at 8:13 am to Hayekian serf
Utility ETFs like XLU should also benefit from the current climate.
I have about 25% in high income ETFs like SVOL, JEPQ and SPYI and they'll provide some hedge.
I have about 25% in high income ETFs like SVOL, JEPQ and SPYI and they'll provide some hedge.
Posted on 8/5/24 at 8:18 am to Nole Man
Only issue with OP is if the Fed cuts rates aggressively and inflation comes back around these will get hammered.
I’d be quick to be out if in long dated treasuries. With rates plummeting over last month or so, most of the easy money has already been made.
I’d be quick to be out if in long dated treasuries. With rates plummeting over last month or so, most of the easy money has already been made.
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