This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Contrarian Ideas for the Summer

ETFs for buying U.S. Treasuries include TLT, the iShares Barclay's 7-10 Year Treasury Bond Fund (IEF) and the iShares Barclay's 1-3 Year Treasury Bond Fund (SHY).

There is one ETF for selling (shorting) Treasuries: the ProShares Ultrashort 20-Plus Year Treasury (TBT). An investor has the choice of shorting one of the three long-position funds or buying the leveraged long-term bond short position fund.

Reminder No 1: The three iShares funds pay dividends monthly, worth between 3% and 4% per annum. If you are short any of these, you will pay the dividend each month. Reminder No. 2: TBT has the same problem as many other funds, particularly leveraged funds, of accumulating daily tracking errors. Performance over many months can be much less than expected for perfect tracking.

Here are some additional cautions to help you avoid jumping in front of a speeding train:

  • Some of the ETFs mentioned in this article are leveraged. An investor should always study the prospectus carefully before investing. Tom Lydon has written about some of the things you should be aware of regarding leveraged ETFs. (In this article we mentioned the long-term tracking problem several times and gave one detailed example in idea No. 7, real estate.)
  • Present prognostication is no guarantee of future results. Do your own due diligence. Study the images you see of speeding trains and then decide which are real trains and which are illusions.

Again, just remember, one always has the option of buying puts on a long ETF (if optionable) rather than selling short or buying an inverse ETF.

At the time of publication, The author, family members and his clients own SKF. Family members and clients own Vanguard Health Care (VGHCX).

John B. Lounsbury is a financial planner and investment adviser, providing comprehensive financial planning and investment advisory services to a select group of families on a fee-only basis. He worked for 34 years with IBM, and spent 25 years in R&D management and corporate staff positions. He also was a Series 6, 7, 63 licensed representative with a major insurance company brokerage for nine years.

Specific interests include political and economic history and investment strategy analysis. He holds degrees from the University of Vermont, Columbia University and the Illinois Institute of Technology, where he studied chemistry, physics and mathematics. He is a contributor to Seeking Alpha and his own blog, PiedmontHudson.

10 of 10

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
DDG $24.97 -0.68%
LQD $117.55 -0.31%
SSO $68.82 -0.19%
URE $103.22 -0.47%
UDN $21.98 -0.86%


DOW 18,262.71 -23.03 -0.13%
S&P 500 2,129.25 -1.57 -0.07%
NASDAQ 5,096.9430 +6.1490 0.12%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs