Editor’s Note: Now that the Labor Day weekend is behind us, it’s time to focus on the one thing that unites most Americans: football season! In this country, fall weekends are the exclusive province of big men smashing into each other in pursuit of a little brown ball.

I was one of those men a long time ago. I played tight end for a small college football team that was always outmatched, yet we managed to win our fair share of games.

Just as the favorites don’t always win at football, the stock market isn’t always the best place to invest your money. That doesn’t often happen, but one of those times may be coming this fall depending on which way the economy turns.

Wheel Route

Since the conclusion of the Great Recession 18 years ago, the yield of the 30-year U.S. Treasury Bond has mostly traded in a range between 2.5 percent to 5.0 percent. The notable exception occurred five years ago when the Fed pursued its zero-interest-rate-policy (ZIRP) after the onset of the coronavirus pandemic.

For about a year, those bonds were yielding less than 2.0 percent as investors feared that the global financial markets might collapse. Fortunately, that didn’t happen, and bond yields recovered quickly as the Fed allowed rates to rise.

In May, the yield rose above 5.1 percent as Wall Street fretted that the recently enacted import tariffs would be inflationary. Instead of a rate cut by the Fed that the White House was demanding, a rate increase seemed possible if retail prices started soaring to reflect the cost of those tariffs.

So far, that hasn’t happened. Last week’s Personal Consumption Expenditures (PCE) price index report for July reflected a 0.3. percent monthly rise in “core” PCE, which excludes food and energy prices. Over the past twelve months it grew by 2.9 percent, higher than the Fed’s 2.0 percent target rate but still within tolerance.

Button Hook

Meanwhile, the employment situation in this country has grown considerably murkier. A month ago, the jobs report for July showed a huge drop in new job openings. At the same time, the numbers for June and May were revised downward by a substantial amount.

Although the national unemployment rate rose only slightly to 4.2 percent, a sudden downturn in new job openings usually presages a rise in unemployment. That is why everyone on Wall Street will be waiting on pins and needles for the August jobs report that will be released this Friday morning.

For what it’s worth, Wall Street is anticipating the unemployment rate to rise to 4.3 percent. A rise in unemployment is never a good sign for the economy, but an increase of 0.1 percent would be tolerable given the degree of uncertainty about the long-term impact of the recently enacted import tariffs on inflation and employment.

As for new job openings, the expectation is for another anemic number similar to July’s gain of 73,000. Anything over 100,000 would be viewed as encouraging, while a number below 50,000 could trigger panic buttons on Wall Street.

Down and Out

Into that fray steps the 30-year T-bond. It is widely viewed as a proxy for the long-term health of the U.S. economy. A yield below 3 percent is indicative of a weak economy that requires central bank intervention in the form of lower interest rates to stimulate consumer spending.

A yield above 5 percent suggests an overheated economy that may require rate hikes to cool it off. That’s what happened a few years ago after the ZIRP had its intended effect of stimulating the economy. Despite an unprecedented series of rate hikes commencing in March 2022 that raised the Fed’s policy rate by 500 basis points (5 percentage points), the stock market rallied strongly the following year.

Now, Wall Street is demanding a series of rate cuts to justify higher stock prices. If that happens then bond prices should rise as yields fall. And if rate cuts fail to ignite the economy, then bonds may outperform stocks until a new equilibrium between the two asset classes has been established.

Go Long

You don’t need to be an institutional investor with millions of dollars to invest to own U.S. Treasury securities. However, it probably makes more sense for individual investors to do so via an exchange-traded fund (ETF) or closed-end fund (CEF). That way, you obtain portfolio diversification and professional management at a low cost.

One such fund is the Vanguard Long-Term Treasury ETF (NYSE: VGLT). It currently sports a 30-day SEC annual yield of 4.9 percent, pays dividends monthly, and has a very low management fee of .03 percent.

Five years ago, this fund’s share price soared above $100 while the Fed was aggressively cutting interest rates. Three years it had fallen below $50 after the Fed reversed that process.

That is precisely why I think now may be a good time to own a fund like this. If the Fed is once again forced into the position of cutting rates, long-term U.S. Treasury securities could end up being the biggest winner of them all.