+1. I endorse the long-maturity US treasuries as a safe-haven asset. Especially if options are not an option. In a potential bear market, safe-havens are generally preferable to shorting a stock index, which is the wrong side of risk.
Everything dropped in the Corona Crash because brokers got scared and demanded more margin, so everybody had to come up with liquidity quickly. But then the treasuries recovered even faster than the stocks because of the flight to safety. That would have been a good opportunity to rebalance a stock/treasury portfolio and get the stock market on sale.
You can assume a strong flight to safety from most market participants. Typical flight to safety trades are:
Long USD
Long Yen
Long US Treasuries (Of mid to long maturities)
Short commodities (Especially Oil)
It is important to note that in March the flight to safety was so extreme that at one point Long USD was the only positive trade.
EDIT: The trade I decided to do with regards to this situation is Long VIX out of the money calls with expiry in March 2021.
I am already long USD for quite a bit, and I think there is a decent chance the USD strengthens in the near term.
+1. I endorse the long-maturity US treasuries as a safe-haven asset. Especially if options are not an option. In a potential bear market, safe-havens are generally preferable to shorting a stock index, which is the wrong side of risk.
Everything dropped in the Corona Crash because brokers got scared and demanded more margin, so everybody had to come up with liquidity quickly. But then the treasuries recovered even faster than the stocks because of the flight to safety. That would have been a good opportunity to rebalance a stock/treasury portfolio and get the stock market on sale.