Buying I Bonds In 2016? One Word Of Advice: Wait!

As an experiment, I wrote this article as an exclusive for the SeekingAlpha.com Website, so I can’t repeat it in full here. But I can say that this is my advice: Don’t buy I Bonds in January. I’d suggest waiting at least until mid-April.

Story summary:

  • Rates could rise before the Treasury’s next fixed-rate reset on May 1.
  • Threat of deflation could bring a 0.0% return for six months.
  • Wait at least until mid-April to buy, or possibly before or right after the Nov. 1 reset.

Read the full article on SeekingAlpha.com

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3 Responses to Buying I Bonds In 2016? One Word Of Advice: Wait!

  1. Silver_Stacker says:

    Well, I am in the process of saving up a little cash for a purchase in early April anyway, so we’ll see!

  2. Eddie Chinea says:

    Hello, reading Tony Robbins new book that offers this advice: “Basically, if you buy TIPS, you’re betting that we’re heading into a period of inflation. Does that seem likely? If you’re not sure (and, really, nobody ever knows for sure), you may want to do what David Swensen recommends in his ideal portfolio: because TIPS go up in price when interest rates rise (which usually happens during inflationary times), balance them with an equal amount of traditional Treasuries that go down in price when interest rates rise. That way, you’re protected in any situation!”

    Excerpt From: Robbins, Tony. “MONEY Master the Game: 7 Simple Steps to Financial Freedom.” iBooks.
    In your opinion, does this statement have merit?

  3. tipswatch says:

    Eddie, if inflation rises, TIPS will see a matching increase in principal, so the payout increases. However, if inflation rises, interest rates could also rise, on both TIPS and traditional Treasurys. They will tend to move together, but not in lockstep. When interest rates (meaning, yield to maturity) rise on TIPS, the value of the TIPS goes down. I have no problem owning both, although I would tend to mix TIPS, I Bonds and bank CDs, since you get get a better return on CDs than you can on Treasurys, with equal safety.

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