Any Reason for Short-Term Bonds Through Treasury Direct?
As I've said before, bonds totally elude me. So I took it pretty much on faith when I was advised to keep a stash of 13-week T-bills in an account with Treasury Direct. Well, for the entire time I've had these things, they've been rolling over at somewhere between 3 and 4 percent--basically a negative return. And, unlike my short-term bond fund, I get no increase in NAV to offset what seems to be a perpetual decline in yield.
Is there any good reason to hold individual short-term bonds?
On a side note, could anyone help me to understand why are rates on short-term treasuries are remaining so low? I would think that the specter of additional rate cuts (and the resulting expectation of rising inflation), combined with the threat of international diversification of currency reserves, would be putting an upward pressure on short-term treasury yields. Has the "flight to safety" been so strong that it has overcome these factors?
Thanks in advance for your insights!