01/21/2015 7:00 am EST
US government bonds were the big investment winners in 2014, gaining 46%, observes Mary Anne and Pamela Aden, editors of The Aden Forecast.
And it looks like this is going to continue as we move into 2015, very possibly throughout the year,
We know that may seem strange, but it’s really not. Here’s why…
Worldwide demand for US government bonds is huge. With most countries on thin ice as deflationary pressures intensify, bonds have become the world’s favorite safe haven.
The strong US dollar and robust economic growth makes them even more attractive.
Considering the global situation, it would be too risky for the Fed to raise interest rates prematurely. This means bonds will likely keep rising.
The bond ETF we like best is the Ultra 20+ year Treasury (UBT). It’s consistently been the strongest, closely tracking the inverted 30-year yield.
We also like 20+ Treasury Bond (TLT). These have risen far and fast and they’re due for a normal downward correction. That will provide a good buying opportunity if you haven’t bought bonds yet.