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Old 09-18-2007, 01:00 AM   #21
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If you intend to keep a substantial amount of money in short-term paper... you may need to concern yourself with inflation. Especially if that money equal say 10 years of income. I would invest in something that is going to keep up and hopefully earn a little.

As someone stated do not invest in something that you do not understand... educate yourself.

Dealing with inflation in fixed securities is important. If you cannot do it directly, consider using something to hedge.

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Old 09-18-2007, 07:01 PM   #22
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Originally Posted by twaddle View Post
So, looking at today's yields in that historical context, a MM yield of 5% nominal (about 2.5% real) is outstanding! You want to keep that as long as you can.
I think I get you point. As long as short term yields stay high like they are now (relative to long bonds), there is no reason to take the duration risk that exist with long bonds (interest rates going up). However, when/if long yields increase significantly relative to MM yields, I should consider moving to int and long bonds.


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