Hedge funds, banks, professional money managers and everyday investors trade hundreds of millions of shares of SPY and volume explodes whenever there is a major global news event. It pays to have SPY on your watch list and monitor it regularly for big volume swings or price moves. This often can precede a broader change in the direction of the market and may signal that you should adjust your portfolio accordingly. Bonds My favorite ETF for monitoring the bond market is the iShares Barclays 20+ Year Treasury Bond Fund ( TLT). This fund is made up of long-duration U.S. Treasury bonds and often times makes very volatile moves when the Federal Reserve signals a change in its interest-rate agenda. Bonds furthest from their maturity date are typically most susceptible to changes, which is why this ETF can move so rapidly. Think of TLT like the tip of a dog's tail, the point that is going to move the farthest whenever he wags it.
Alternatively you can also look at purchasing a rising-rate fund, such as the ProShares Short 20+ Year Treasury Bond Fund ( TBF), to hedge your fixed-income exposure. Precious Metals Another segment of the economy that is often affected by Federal Reserve commentary is the precious metals sector. The SPDR Gold Shares ( GLD) tracks the spot price of gold bullion and can often see large asset flows based on global sentiment. Typically investors flock to gold during times of economic uncertainty as a type of safe-haven play, similar to Treasury bonds. Gold is also known as an inflationary and currency hedge because of its physical asset qualities.