Nothing is safe in this market, except for the one thing that is safe. Treasuries. Yes, the yield has lowered, but demand has gone through the roof. You don’t have to physically go out and buy notes to get a return on this. Many ETF’s are out there and are growing rapidly as the market collapses. $GOVT is one example of a Treasury ETF that is doing well. Not only do you gain a dividend, but you also gain value in the market. Guess what else, they don’t collapse when the market goes back up, so you don’t have to worry about timing the market as it recovers. For those of you who feel the need to gamble some of your money like me, the low volitility also makes options on these very cheap. $27 6/19 calls are very cheap, and likely to break even by next week and don’t expire for another 4 months. I only have a small amount of money in the options, most of it is in the ETF, but screencapped some of my earnings for reference.
Here is a simplified excerpt from Investopedia that explains this a bit better than I can.
Specifically the section where it states this…
“Fixed-Income Recession Strategy Fixed-income markets are no exception to the general risk aversion of recessionary environments. Investors tend to shy away from credit risks, such as corporate bonds (especially high-yield bonds) and mortgage-backed securities (MBS) since these investments have higher default rates than government securities.
As the economy weakens, businesses have a more difficult time generating revenue and profits, which can make debt repayment difficult and, in the worst-case scenario, lead to bankruptcy.
As investors sell these risky assets, they seek safety and move into U.S. Treasury bonds.”
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.