In his article this week, John Hussman writes
housing weakness, foreclosures, and credit risks will tend to create ongoing surges of demand for Treasuries as safe-havens. So I would expect to gradually increase our exposure in Treasuries in response to any upward spikes in yields that might emerge, but there still isn’t sufficient evidence of economic or credit crisis to warrant heavy bond purchases in anticipation of sustained downward yield pressure.
Marc Faber was on TV the other day suggesting the US dollar would likely weaken significantly, as the US deals with its own problems, and he favored gold and foreign markets. So it was interesting that the Hussman article included this note.
investors should consider prevailing conditions as a warning about assuming substantial risk. This includes foreign and developing markets, because correlations between U.S. and foreign markets suddenly become stronger during periods of market weakness than they are in periods of general stability.