91–100 of 190 posts
Does anyone want to explain why this is an interesting story?
7% on a bond is very good. 7.2% doubles every 10 years. For those of us getting older with lots of stock assets, we (conservative investors) want to transition to something safe so that smash-and-grab market fluctuation don't make us lose our money in retirement. Tiered bonds are something safe to do when you hit your mid 50's once the "thrill" of investing in what are today called "meme" stocks ("penny stocks" in th…
I'm kind of an idiot with anything terribly elaborate in the financial world, so forgive a bit of a dumb question: what are the downsides to bonds instead of using something like a CD?
If you manage to borrow 10k from somewhere else at 3% APR and invest here you're getting 410 risk free. Unfortunately it is capped at 10k...
This doesn't mean what people think it means. They adjust the inflation rate every 6 months https://www.treasurydirect.gov/indiv/research/indepth/ibonds... . Right now it yields 7.12% because the last inflation number was really high, but once inflation goes back to normal, the yield will be much lower.
Some interesting charts on this page. The 7.12% rate consists of a 0.00% fixed rate and a 3.56% inflation rate. The formula is: Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)] 7.12% = [0.0000 + (2 x 0.0356) + (0.0000 x 0.0356)] This rate is only valid until the inflation rate gets re-adjusted after 6 months. There is an interesting chart showing what the fixe…
Is their site right that the maximum yearly purchase is $5k/$10k paper/electronic? That's... not very much.
You can buy as much or as little as you want from your normal broker (schwab, ibkr, fidelity, etc)
This doesn't mean what people think it means. They adjust the inflation rate every 6 months https://www.treasurydirect.gov/indiv/research/indepth/ibonds... . Right now it yields 7.12% because the last inflation number was really high, but once inflation goes back to normal, the yield will be much lower.
Some interesting charts on this page. The 7.12% rate consists of a 0.00% fixed rate and a 3.56% inflation rate. The formula is: Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)] 7.12% = [0.0000 + (2 x 0.0356) + (0.0000 x 0.0356)] This rate is only valid until the inflation rate gets re-adjusted after 6 months. There is an interesting chart showing what the fixe…
7% is likely a negative real rate at the moment.
Earlier quoted context omitted.
We would not be "in the Cater [sic] Years" regardless. The lowest inflation reported in the late 70's was about 5%, with a peak at 15%. Last year's post-covid number was 5.4%. Your point seems mostly like demagoguery. I think the more interesting question is... is 5% actually bad? There's a real argument to be had here that rapid inflation reflects genuine improvements like rising wage levels and that it's worth payi…
Exactly. As a well to do tech person, the impact of 10% inflation is nil when my retirement funds returned 25%. Now if I was some über rich dude with millions of capital tied up high friction investments, forced to choose between paying capital gains taxes or losing to inflation, i may feel differently. Frankly, we need to put shitty businesses that exist by virtue of low interest rates out of business. It should not…
But your average Joe and Jill in the world working restaurants or deliveries, they can't just shrug it off.
This yield means we are expecting much higher inflation than normal. The 2% target was missed.
This doesn't mean what people think it means. They adjust the inflation rate every 6 months https://www.treasurydirect.gov/indiv/research/indepth/ibonds... . Right now it yields 7.12% because the last inflation number was really high, but once inflation goes back to normal, the yield will be much lower.