This is good for long-term bonds, which have traditionally been one of the best hedges against troubles in the general US stock market.

This isn't just a holdout from what we've seen since the US stock market’s big fall in the past few days. Whenever stocks take big, sustained hits, you better have a port of safety in your immediate horizon or you'll regret it.

During stock market corrections, historically nothing else outperforms long-term Treasury bonds. Stock investors are believers in growth and expansion. When their beliefs are shattered, they move quickly to dump their growth-oriented holdings. Treasury bonds for primary markets--such as the US, European Union and even Japan--quickly become the safe spot in a storm.

Slowed expectations for stocks and economic growth tend to be good for eventual, subdued inflation. And with less competition from stocks, long-haul, fixed-income streams begin to look extremely enticing, particularly during the early stages of a market and economic contraction.

Just look at the recent corrections in the US markets. As stocks went from a peak toward a trough, long-haul Treasurys rallied in value as their yields headed south. And the longer the bond, the greater the price-to-yield relationship.

For 30-year bonds paying regular coupons, the price of a bond will change by an average of 17 percent for each 1 percent fall in yield. And for zero-coupon bonds--also known as strips--the relationship is even more dramatic: For each 1 percent change in yield for a 30-year strip, the price will change by 30 percent.

That’s a big help when you’re trying to generate a hedge for your stock portfolio.

Come and Chat

If you’d like to hear firsthand about some of our investments, particularly those in some of the more-interesting markets beyond the usual Wall Street fluff, join me on one or more of my upcoming conferences or travel opportunities--see below for the various opportunities available.

Head out to the East Coast, and join me and PF Associate Editors Roger Conrad and Elliott Gue at the Washington, DC, Money Show, Sept. 6-8, 2007. The conference will take place at the Wardman Park Marriott, located in downtown Washington DC. Click here to register for free. Be sure to tell them I sent you.

Noble palaces, historic villages, stunning natural vistas and indispensable, one-on-one conversation: I’ll be cruising down the blue Danube Sept. 8-16, 2007, along with PF Associate Editors Roger Conrad and Elliott Gue. You’ll have unfettered access to talk about your portfolio or any other topic that comes up as you take in Central Europe’s rich culture and historic beauty aboard the River Cloud, a “five-star floating hotel.” Interested in exploring Europe and your portfolio? Contact Joseph H. Conlin Travel Management toll free at 877-814-6502 or via e-mail at nycimpresario@mac.com to finalize your plans.

Farewell

Finally, a man who knew how to come back from some tough times and challenges died tragically at 56 years. Skip Prosser was the man who took the solid, but not championship, Wake Forest basketball team and brought it all the way to No. 1.

If you’re interested in having me or one of my cohorts address any investment or professional groups, please e-mail me at bygeorge@kci-com.com with ideas or suggestions.

Neil J. George, Jr.

Errors/Omissions: I always welcome being called on facts, figures and commentary from readers and look forward to your feedback. I can be reached by e-mail at bygeorge@kci-com.com.