4 ms·
> They're zero-risk bonds with an interest rate that always matches or exceeds inflation The caveat is that you must agree with how your govt. calculates infla
by pid-1 4y ago
> They're zero-risk bonds with an interest rate that always matches or exceeds inflation
The caveat is that you must agree with how your govt. calculates inflation. Also, your personal expenses might not be well represented by official inflation. Finally, like any bond, if you sell them before they mature you might get smaller (or higher) returns.
Not saying this is a bad investment though, I just rarely see those risks discussed!
- Breza 4y agoI think of I bonds as playing the role that savings accounts are supposed to play: Park your longterm emergency fund and protect it against inflation
- prepend 4y ago> The caveat is that you must agree with how your govt. calculates inflation. This is an easy caveat to make as there are many other parts depending on how the US government calculates inflation. And there aren’t alternate inflation calculations out there, and certainly no consumer financial instruments pegged to them. For all its flaws, it’s the best we have. I think it’s not discussed because it’s such a sunk risk that it’s not really anything that would change someone’s mind.
- bzxcvbn 4y ago> there aren’t alternate inflation calculations But there are. Institutions such as the IMF also have their own economic measurements.
- everybodyknows 4y ago> there aren’t alternate inflation calculations There are several. CPI-U, CPI-W: https://www.bls.gov/cpi/overview.htm https://www.bls.gov/cpi/overview.htm PCE deflators: https://fred.stlouisfed.org/categorie https://fred.stlouisfed.org/categorie s/21