The stock market’s volatility is enough to make any investor a bit cautious. You can go long or go short but the daily gyrations of the market are enough to make even the riskiest investing personality seek at least a little safety.

One way to protect a portion of your portfolio is to put it in long-term U.S. Treasury bonds. Such bonds are backed by the full faith and credit of the U.S. government. In today’s world of record federal budget deficits, I can appreciate that such guarantees are not as compelling as they might have been in the past. However, there may not be another national government viewed by investors as creditworthy as the one based in Washington, D.C., which still is the capital of the free world.

The iShares Barclays 20+ Year Treasury Bond Fund (TLT) offers a way to tap the U.S. government’s reputation as a dependable creditor. The exchange-traded fund (ETF) seeks to produce a total rate of return that tracks the long-term sector of the United States Treasury market through the Barclays Capital U.S. 20+ Year Treasury Bond Index. The fund will mark its eighth year of existence on July 22, so it is one of the more established ETFs around.

The long-term nature of the fund also means that its share price is more likely to rise and benefit from capital appreciation than short-term treasury funds as interest rates fall. Worries about inflation seem less immediate than deflation right now, in light of the ongoing housing bubble, job losses and economic weakness. With government bond funds in general not paying much interest, the additional reward that an investor can gain from the capital appreciation potential of long-term bonds is worth considering. It also sure beats going long in the stock market and watching the value of your holdings melt away.

The preceding chart shows that TLT has been on a sharp climb since April. The fund is showing no signs of losing its momentum as many investors are looking for a place to protect their money when the stock market is retreating. If you sleep well at night at the thought that a portion of your money isn’t tied to the ups and downs of the stock market, now might be an ideal time to consider making an investment in TLT. It is a fund that I have recommended in the past and that I am keeping my eye on right now.

To obtain my latest ETF advice and my stop prices for each recommendation, I urge you to subscribe to my ETF Trader service. As always, I am pleased to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.