The recent downward selling pressure in October is one that has investors searching for safe havens amid an uncertain economic backdrop. This effect has been magnified by multiple days of heavy volume and expansion of volatility that has only recently shown signs of abatement.

Not surprisingly, some of the strongest momentum areas have been trading vehicles that are directly correlated to a market sell off or volatility theme. This includes funds such as the iPath S&P 500 VIX Short-Term Futures ETN (VXX) and ProShares UltraShort QQQ (QID). While these aggressive plays are one way to take advantage of a broad-based decline in equity prices, most investors won’t have the fortitude or discipline to trade these fast moving areas.

​ETFs (iStock photo)

Fortunately, there are a variety of traditional sectors and opportunities that are continuing to show excellent relative strength as well. These primarily include interest rate sensitive themes such as fixed-income, REITs, and utilities that are known for their defensive properties during times of distress.

The iShares 20+ Year Treasury Bond ETF (TLT) has continued to post impressive gains as stocks have retreated from their highs. Credit risk-free Treasuries are one area of the market that are most known for the adage “flight to quality” when traders shirk riskier assets such as stocks, high yield bonds, and commodities. TLT has gained more than 4% this month and over 22% for the year as falling interest rates directly press bond prices higher.

Read the full article at NASDAQ.com