US Bonds Hit Low Yields--Time To Consider Puts?

So much of life, as Obi-Wan Kenobi once almost said, is dependent on our point of view.

And we're seeing how true that is in the bond markets--especially the United States bond markets--where investors are bugging out of most other markets and heading into United States Treasuries. Thirty year bond yields are at four-month lows, and this is great news for anyone getting bullish on bonds.

However, like so much in life, there's a caveat. The yields are certainly lowering, but the United States government is making hay while this particular sun shines. They've already scheduled a new auction next week--eighty billion dollars worth of treasuries, and twenty percent of that issue will be the thirty year bonds that are at their lowest right now.

So what do you do at this stage of the game? Do as so many are doing and flee the "risky" investments for low-yield United States bonds? Or wait a bit for yields to recover? Me personally, I'd say wait. This move strikes me as a panic reaction to uncertain circumstances, and I'm not alone on this one. There's a school of thought that says June bond futures will see increased volatility, so there may be a good move in bond calls and bond puts. Your mileage will vary of course, as that's strictly a speculation, but there's certainly some evidence that it may be a good move.