Own Longer-Dated Bond ETFs

September 14, 2015

  • Do you have the time to follow the model every day?
  • Do you have the infrastructure in place to trade across multiple accounts?
  • Can you execute ETF trades with little market impact and trade for very low commission?
  • Do you have the conviction and belief necessary to follow the process through both losing trades and winning trades?
  • Can you stick to the process over time?

A popular saying on Wall Street is "the trend is your friend." I believe that to be true, and the Zweig bond model has done a good job over the years at identifying the major interest-rate trends. It currently says "buy" longer-term-dated ETFs.

Rates are low today, and the Fed looks to take its first step toward "normalizing" interest rates. According to the CME Group FedWatch, there is a 24 percent probability the Fed will hike on Sept. 17. Should they, next week may bring fireworks. Think tactically with your ETF bond exposure.

At the time of writing, the author's firm owned shares of the securities mentioned above on behalf of clients. CMG is an ETF strategist specializing in tactical investing, using trend-following and relative-strength-based strategies. CMG Chairman CEO and CIO Stephen Blumenthal also writes for Forbes and speaks on various radio and TV shows. Contact CMG at 610-989-9090 or at [email protected]. Click here to receive his free weekly e-letter. For a list of relevant CMG disclosures, click here.

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