Yes, that’s indeed the main point. I agree both TLT but also Gold had an incredible run, and we’re at historical low rates, and a very strong Dollar.
That’s the psychologically tough part of Momentum driven strategies: Buy when things have already moved quite a bit, sell even if you think the party might re-start.
However, we’re late in the cycle, and despite the ‘bit’ of volatility recently we’ve not seen any serious correction yet, were the flight to safety moves such safe-haven prices much more violently.
Just some days ago replied to a comment re how negative yields feel like in Europe, so who says they 1.5% in the US is the bottom? See the comment by Vangelis today what it would take to devaluate the USD rate-wise.
If you feel uncomfortable with long term bonds or gold, the signal basically says ‘risk-off’. Cash is an alternative, even if historically in our models you’d lost some of the performance.