> There's no faculty in US tax code for reporting earnings on this kind of investment. That's not true. > Also, as far as risk-adjusted returns go, it still b

> There's no faculty in US tax code for reporting earnings on this kind of investment. That's not true. > Also, as far as risk-adjusted returns go, it still beats equities, right? The S&P 500 was around 1,140 at the beginning of January 2010. It's now above 2,000. If you had bought SPY in January 2010, you'd be sitting on a gain of around 75% not including dividends. SPY is highly liquid (more than 80 million shares trade hands on any given day) and optionable, so you can exit your position quickly if necessary and easily hedge your position if desired. Needless to say, comparing the S&P 500 to a pure debt instrument is like comparing apples to oranges, but if your goal is to maximize risk-adjusted returns, you have to compare asset classes. Obviously, this isn't 2010. The market today is a lot harder to navigate. On the whole, equities look expensive and with a shift in interest rate policy almost certainly coming, the debt markets are tricky. As Sam Zell recently said, "This is the first time I ever remember where having cash isn't such a terrible thing."