CaptainO
Dryer sheet aficionado
I’ve seen a lot of disapproving remarks about buying long-term Treasury bonds on this and other forums. Most of them seem to focus on the risk, that if interest rates increase, you will lose principal.
The way I see it, that risk is not a factor for 30 years if the bond is held to maturity. After 30 years, who knows what interest rates will be, and more than likely, most retirees will be taking that long siesta in the sky, so who will care? Even if you’re hanging in there after 30 years, you’ll still get the face value of the bond, which yes, won’t buy as much as now, but at 95 years old, you probably won’t be taking any European vacations, either. In the meantime, you’ve been getting a risk free 4%-5% (maybe soon) for 30 years.
Why then does this not seem to be considered a good way to invest a portion of your retirement savings? Am I missing something?
The way I see it, that risk is not a factor for 30 years if the bond is held to maturity. After 30 years, who knows what interest rates will be, and more than likely, most retirees will be taking that long siesta in the sky, so who will care? Even if you’re hanging in there after 30 years, you’ll still get the face value of the bond, which yes, won’t buy as much as now, but at 95 years old, you probably won’t be taking any European vacations, either. In the meantime, you’ve been getting a risk free 4%-5% (maybe soon) for 30 years.
Why then does this not seem to be considered a good way to invest a portion of your retirement savings? Am I missing something?