What IS the Norweigan Widow anyway?

[maddythebeagle]

Hush Mandythebeagle. All we have to keep the hordes at bay is rain, burping mountains and a twitch or two. Once folks realize that it rains, they swelter in the summer, that they have tornados and earthquakes in MO, how are we to keep this place to our selves?

We have something similar in Northern Wisconsin. Just warn folks of the potential for frostbite and that keeps them away. And the summer months are spent cutting wood for the upcoming winter.

 

[bosco]

From the TIPS FAQ:

What happens to TIPS if deflation occurs?

The principal is adjusted downward, and your interest payments are less than they would be if inflation occurred or if the Consumer Price Index remained the same. You have this safeguard: at maturity, if the adjusted principal is less than the security's original principal, you are paid the original principal.

Series I bonds are the inflation-adjusted version of the savings bond. The difference between them and TIPS is that the Treasury factors inflation into the interest rate instead of the principal. The adjustments are made every May and November.

from http://www.bankrate.com/brm/news/sav/20021018a.asp

therefore, if you both types of bonds to maturity it doesn't matter. But TIPS principal prior to maturity, during deflation will decline, although you will be paid back the nominal value if you hold until maturity.

from http://www.fool.com/retirement/retireeport/2000/retireeport000626.htm

Like TIPS, I Bonds enjoy inflation-protected earnings that guarantee a real rate of return over and above the inflation rate. In the case of deflation, wherein the decline in the CPI-U exceeds the fixed rate of return on the I Bonds, the redemption value (i.e., original purchase price plus accumulated monthly earnings) does not decline but remains the same. While TIPS may fluctuate in market value based on interest rate and inflation index changes, the redemption value of I Bonds is always known and readily determinable.

 

[Mr._johngalt]

I did it, and I don't think I would have used common stocks even if I had been a
lot younger.  Maybe.   We'll never know now.  Most of the older
retirees I know (older than me - where I have a sense of their
finances) still have stocks in their portfolio.  I think I sense
(very small sample group) stock avoidance tendencies  in people who went through the Depression, and heavy stock investment by younger "traditional age" retirees
who hire or listen to financial planners and their ilk. 

JG

Now this is interesting. One of the guys I had in mind
(retired dentist, 68) e-mailed me today to say he was
unhappy with his big name financial management firm and has
dumped them. For now he eschews stocks and is 100%
MM/CDs and bonds. Guess he read John Galt's guide to
retirement finances.

JG