Comment by ryandrake | Hacker News Reader

Comment by ryandrake | Hacker News Reader

The yield curve is inverted so short term treasuries are great right now. There’s little reason to have a typical savings or money market account or even a money market / bill fund when you can just put together a 3 month treasury ladder and get 5.25+%.

Longer term treasury bonds don’t seem so smart given the threat of sustained inflation. If you’re looking for longer term fixed income, maybe TIPS or Series I bonds are a good choice. I bond rates aren’t as great as they were a few years ago, but until end of this month you can take advantage of 5.27%, including a fixed rate component of 1.30% which is a 17 year high. You‘ve got a bond that will beat inflation by 1+% for 30 years. Not too bad.

> There’s little reason to have a typical savings or money market account or even a money market / bill fund when you can just put together a 3 month treasury ladder and get 5.25+%.

Quibble: There are Treasury money-market funds with the same tax advantages (just pay attention to the government obligation percentages when you do your taxes), and basically the same yields, because that is in fact what they're doing under the hood. And they can be a little easier to deal with than putting a ladder together yourself. E.g., FZFXX, SNSXX, VUSXX.

Absolutely and yes they're convenient. It comes down to personal preference. I don't feel like paying someone to create a ladder for me, at least not 20-30 basis points. Most people would be fine with the funds, too.

>> You‘ve got a bond that will beat inflation by 1+% for 30 years

Pre-tax. You'll owe federal income tax on the interest.

Yeah, I think this is part of the reason we have continuing inflation, and a continuing bubble in dumb stocks. The Fed still isn't offering positive real post-tax returns.

Good point that I failed to list. It's tough to have positive -real- returns in risk-free fixed income. One advantage of government debt is that it's tax-free at the state level which is important if you live in California, New York, New Jersey, and so on.

Correction, Beat the CPI, not inflation

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