Golden Age for Bonds

Treasury Sets I Bond Rate Over 5%, but Advisors Say It May Not Be Worth It
https://www.investopedia.com/treasury-announces-new-i-bonds-offering-more-than-5-for-next-six-months-8385040?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral

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Summary

The US Treasury has set the interest rate on inflation-protected I bonds purchased from November through April next year at 5.27%, up from 4.3% over the past six months. However, some advisors say that investing in an I bond may be losing its appeal now, at a time when yields on even the safest Treasurys exceed 5%.

They argue that there are other fixed-income investments, such as certificates of deposit (CDs) or money market funds, that can generate higher returns over the next 1-2 years. They also suggest that Treasury Inflation-Protected Securities (TIPS) could be a better option for investors who are looking for a higher fixed rate and don't mind the volatility of the bond market.

However, one advisor says that I bonds could still be a good option for investors who are looking for an emergency fund savings that will always beat inflation.

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Comment

We're in a golden age for bonds.

However, Treasury yields are still running high, and investors who invested early are still accumulating capital losses, so it's a bit of a painful situation to watch.

In the long run, most experts recognize that interest rates are close to their peak, and the FED in the US has taken that stance, but you always have to keep in mind the inflationary surprises that can happen, so the market doesn't always move in the direction you want it to.

This is a time when we need to be disciplined and make an effort to always have a balanced investment and a balanced view of the market.