The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: AdrianC on November 05, 2018, 08:54:45 AM
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"The composite rate for I bonds issued from November 1, 2018 through April 30, 2019, is 2.83%. This rate applies for the first six months you own the bond."
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm
The fixed rate is 0.5%, highest its been for nigh on a decade.
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So a risk free 3.33%? Not bad at all! I buy a small amount on the 15th of every month.
With trillion dollar deficits, I assume we will see higher yields in the future.
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Yeah, it's 0.5% fixed plus an inflation component, giving 2.83% total.
We just bought our 2018 allocation.
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Newbie here,
With our current market, would you advise to buy I-Bonds every year?
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Newbie here,
With our current market, would you advise to buy I-Bonds every year?
Without more context, there is no right answer.
Do you have an asset allocation that calls for a fixed income component? I-Bonds could be one of several possible choices for that part of your asset allocation.
Bonds of any type are not generally employed as "good investments." The role bonds play in your asset allocation, most typically, is to add ballast to your portfolio to help smooth out the volatility of other parts of your portfolio's asset allocation.
Whether you should care about volatility at all depends quite a bit on your personal risk tolerance, your age, near-mid-long term financial goals, and whether you are already retired, or how long you expect to continue working before retirement.
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Thank you so much. I have 60% of my portfolio in stocks, and I was advised by personal capital to diversify into bonds. I have SHMMX Bond Fund ( moved this to Vanguard from Primerica recently to avoid fees. Stupid me, I did not do any research- l was thinking I could transfer to VBMFX BUT was told last week that I will incur a lot of fees since it is a Bond fund?????- pay capital gains???) I bought I-Bonds this year but was wondering if I should buy it yearly if I do have funds.
Newbie here,
With our current market, would you advise to buy I-Bonds every year?
Without more context, there is no right answer.
Do you have an asset allocation that calls for a fixed income component? I-Bonds could be one of several possible choices for that part of your asset allocation.
Bonds of any type are not generally employed as "good investments." The role bonds play in your asset allocation, most typically, is to add ballast to your portfolio to help smooth out the volatility of other parts of your portfolio's asset allocation.
Whether you should care about volatility at all depends quite a bit on your personal risk tolerance, your age, near-mid-long term financial goals, and whether you are already retired, or how long you expect to continue working before retirement.
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Thank you so much. I have 60% of my portfolio in stocks, and I was advised by personal capital to diversify into bonds. I have SHMMX Bond Fund ( moved this to Vanguard from Primerica recently to avoid fees. Stupid me, I did not do any research- l was thinking I could transfer to VBMFX BUT was told last week that I will incur a lot of fees since it is a Bond fund?????- pay capital gains???) I bought I-Bonds this year but was wondering if I should buy it yearly if I do have funds.
If you have 60% in stocks right now, where is the other 40%? In cash?
I-Bonds would certainly be better than cash, assuming you don't have a near term need to use that cash.
Disclaimer: I am not a qualified financial advisor. Have you discussed with personal capital what your options are for how best to deploy that 40%?
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As I near FIRE my investment policy statement directs me to have some bonds in my asset allocation. A guaranteed return of 0.5% more than inflation, tax-deferred, seems like a pretty good deal there.
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Sorry I misspoke..i have 70% in stocks, 20% in bonds and 10% in cash.
Thank you so much. I have 60% of my portfolio in stocks, and I was advised by personal capital to diversify into bonds. I have SHMMX Bond Fund ( moved this to Vanguard from Primerica recently to avoid fees. Stupid me, I did not do any research- l was thinking I could transfer to VBMFX BUT was told last week that I will incur a lot of fees since it is a Bond fund?????- pay capital gains???) I bought I-Bonds this year but was wondering if I should buy it yearly if I do have funds.
If you have 60% in stocks right now, where is the other 40%? In cash?
I-Bonds would certainly be better than cash, assuming you don't have a near term need to use that cash.
Disclaimer: I am not a qualified financial advisor.
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Thanks! I am also in Seattle.Hope you are Hawks fan
As I near FIRE my investment policy statement directs me to have some bonds in my asset allocation. A guaranteed return of 0.5% more than inflation, tax-deferred, seems like a pretty good deal there.