The important difference between these strategies is that nominal Treasury bonds have a lot of inflation risk. If you buy a 20-year Treasury, you know how many dollars you will have in 20 years, but not what those dollars will be worth. The TIPS ladder avoids that risk, as you know how much purchasing power you will have when each bond matures.Too risky for me.I see that the current 20 and 30-year Treasury Bonds have a respectable return of 4.625% and 4.5% respectively.
I am comparing them to Vanguard's BND ETF to understand the differences between the two.
BND is liquid, it's value as well as rate of return can fluctuate.
For someone looking for a stable investment, who is ok with a 4%+ return over 20 or 30 years and who does not need to withdraw monies from the treasury bond, it seems like a good investment right now.
Am I missing anything ?
I bought a 30-yr TIPS ladder instead.
Statistics: Posted by grabiner — Sat Jan 18, 2025 5:06 pm