Gyroscopic Investing

https://treasurydirect.gov/news/2022/re ... -02-rates/ -- Fiscal Service Announces New Savings Bonds Rates, Series I to Earn 6.89%, Series EE to Earn 2.10%

Sorry if I missed a prior post on this

First time in a couple of years that the fixed rate isn't 0%

So it was a mistake to wait till November on ibonds? Dunno what this chart means, 12 years to come out ahead or something

With the expected passage of 1 Nov. re-set rate for I-bonds, the dust is beginning to settle:

1. For short-term I-bond investors, the variable interest component rate fell from 9.62% to 6.48%. for an annualized rate of 8.2%, if you bought before 1 Nov. This looks like a severe fall off until you consider that a comparable 1 year Treasury currently yields 4.8%. I-bonds still beat the pants off Treasurys and bank CDs. In fact, given a current expected rate of inflation of 5%, the FDIC should re-name CDs as "certificates of confiscation" because that is exactly what you are getting if you plunk down your Cash on them.

2. For long-term I-bond investors, Treasury’s decision to add a 0.4% fixed component to I-bonds purchased after 1 Nov. represents (for me, anyway) an unexpected gift. The fixed component rate make I-bonds more valuable the longer that you hold them because I-bonds are tax-deferred for 30 years and their interest compounds semi-annually. If you still hesitated about buying I-bonds you now have a risk-free opportunity to beat inflation. Deep Cash indeed!

3. Treasury did not cover itself with glory when confronted by a massive wave of investors who know a good deal when they see it. In retrospect, it seems dumb to have launched an update to the webpage in the midst of the run-up to the 1 Nov. re-set. Our Treasury Department can do better than this.

jhogue wrote: ↑Fri Nov 04, 2022 10:09 am With the expected passage of 1 Nov. re-set rate for I-bonds, the dust is beginning to settle:

<snip>

Thanks for the additional info!

I’m ready to buy more iBonds in January!

David Enna gives an extended consideration of how to time a sale of I-bonds to yield the optimal interest rate for the short-term investor.

See his column at: https://tipswatch.com

Note that,( like me), his preferred strategy is to always buy the max every year and never sell before 30 year maturity-- or when you need to convert Deep Cash into the green stuff.