Comments on: I-Bonds Fixed Rate for May 1, 2007 http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: S. B. http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html/comment-page-1#comment-132 S. B. Fri, 04 May 2007 04:28:00 +0000 http://blog.thefinancebuff.com/?p=109#comment-132 In early 2001, I purchased $5K of I-bonds with a rate of 3.4%+CPI. In retrospect, I really regret not purchasing a lot more. I remember browsing through Ibbotson at the time and finding that over time short term bills returned about the inflation rate and long term treasuries returned about 2% over inflation (if I am remembering the stats correctly).<br/><br/>I could not understand why I-bonds (and also TIPS at the time) were well over 3% + CPI. (At one time, I believe TIPS were over 4%.) And as you are aware, I-bonds essentially have an embedded put in them and also allow you to defer taxes on the interest, which is a rare thing with any sort of fixed income security. At the time, it looked like a steal, but I kept thinking there must be something I don't understand, so I only put one toe in the water. <br/><br/>(Reminds one of a bad joke: Two economists are walking down the street. One sees a $50 bill on the sidewalk. The other remarks that since markets are efficient, if it really were a $50 bill, someone would have picked it up long ago. So they walk on without picking it up...)<br/><br/>Alas, I fear the days of 3% and 4% TIPS and I-bonds may be gone forever... In early 2001, I purchased $5K of I-bonds with a rate of 3.4%+CPI. In retrospect, I really regret not purchasing a lot more. I remember browsing through Ibbotson at the time and finding that over time short term bills returned about the inflation rate and long term treasuries returned about 2% over inflation (if I am remembering the stats correctly).

I could not understand why I-bonds (and also TIPS at the time) were well over 3% + CPI. (At one time, I believe TIPS were over 4%.) And as you are aware, I-bonds essentially have an embedded put in them and also allow you to defer taxes on the interest, which is a rare thing with any sort of fixed income security. At the time, it looked like a steal, but I kept thinking there must be something I don't understand, so I only put one toe in the water.

(Reminds one of a bad joke: Two economists are walking down the street. One sees a $50 bill on the sidewalk. The other remarks that since markets are efficient, if it really were a $50 bill, someone would have picked it up long ago. So they walk on without picking it up…)

Alas, I fear the days of 3% and 4% TIPS and I-bonds may be gone forever…

]]> By: TFB http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html/comment-page-1#comment-127 TFB Wed, 02 May 2007 06:59:00 +0000 http://blog.thefinancebuff.com/?p=109#comment-127 I'll redeem my EE bonds over the next few months as they reach the 5-year penalty-free holding period. I'll probably do the same for my 1.6% I bonds. Keeping 2.0% and 3.0% I bonds for now. I'll redeem my EE bonds over the next few months as they reach the 5-year penalty-free holding period. I'll probably do the same for my 1.6% I bonds. Keeping 2.0% and 3.0% I bonds for now.

]]> By: indexfundfan http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html/comment-page-1#comment-126 indexfundfan Tue, 01 May 2007 21:06:00 +0000 http://blog.thefinancebuff.com/?p=109#comment-126 I got rid of the last EE bond some time last year. Still holding some I bonds though.<br/><br/><a HREF="http://www.indextown.com" REL="nofollow">indexfundfan @ indextown</a> I got rid of the last EE bond some time last year. Still holding some I bonds though.

indexfundfan @ indextown

]]> By: Robert http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html/comment-page-1#comment-125 Robert Tue, 01 May 2007 16:44:00 +0000 http://blog.thefinancebuff.com/?p=109#comment-125 You probably have this, but here's the link of the fixed rates since I-bonds started.<br/><br/>http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm<br/><br/>Ahh the days of 3% fixed rates. Sigh. You probably have this, but here's the link of the fixed rates since I-bonds started.

http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm

Ahh the days of 3% fixed rates. Sigh.

]]> By: Robert http://thefinancebuff.com/2007/05/i-bonds-fixed-rate-for-may-1-2007.html/comment-page-1#comment-123 Robert Tue, 01 May 2007 15:31:00 +0000 http://blog.thefinancebuff.com/?p=109#comment-123 I guess Uncle Sam prefers to get its loans from China rather than we regular US folks who (used to) uy I-bonds. :-) I guess Uncle Sam prefers to get its loans from China rather than we regular US folks who (used to) uy I-bonds. :-)

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