By Richard Suttmeier
Treasury bonds, gold and utility stocks satisfy the 'flight to safety' needs of investors. Here's how to trade them via ETFs.
Investors are still hunting for safe, dollar-denominated assets. The yield on the 30-year U.S.treasury bond remains well below its June 23 Brexit high of 2.563%. Comex gold is well above its June 24 low of $1,252.8 the Troy ounce. The utilities ETF traded as low as $49.79 on June 24, and today appears poised for an all-time high.
"Flight to safety" investing in dollar-denominated assets can be accomplished by buying exchanged-traded finds backed by U.S. treasuries, gold bullion and dividend-rich utility stocks.
The yield on the 30-year U.S. bond is consolidating the decline to a record low of 2.089%, set on July 11. My monthly key level is 2.380%, with an annual pivot of 2.265% and a quarterly pivot of 2.150%. These levels define the ranges that can be traded.
Investors can trade the U.S. Treasury 30-year bond like a stock using the 20+ Year Treasury Bond ETF (TLT) , which is an exchange-traded fund backed by a basket of U.S. Treasury bonds with maturities of 20 years to 30 years.
Comex gold futures traded to a multiyear high of $1,377.5 on July 6, and my upside target for 2016 remains $1,639.9. A setback to a low of $1,310.7 on July 21 is well above the July value level of $1,276.4. Investors can trade gold like a stock using the SPDR Gold Shares ETF (GLD) , which is backed by gold bullion.