Investing - Theory, News & General • Y'all may be missing the point of TIPS

If I-bonds were as easy to deal with as treasuries ... that'd be great. But I didn't want the hassle of Treasury Direct ...

Before I first dealt with Treasury Direct a few years ago I dreaded even the thought, having heard how difficult a task it presented. Then I signed up for Treasury Direct and bought some I-bonds. Where was the dreaded hassle? It was one of the simplest financial transactions I have ever made. IMO people who have problems buying and redeeming I-bonds through Treasury Direct have no business handling their own or other people's finances. Buying I-bonds is truly a very easy purchase.

BobK

Thanks for the opinion, but between selectively removing most of my post and making an incorrect wild guess about what I considered the "hassle" of treasury direct you have completely misrepresented why I'm not using i-Bonds. I'm sure that was unintentional.

Here the relevant part of my post:

If I-bonds were as easy to deal with as treasuries and I could buy enough of them, that'd be great. But I didn't want the hassle of Treasury Direct, nor could I buy enough iBonds, nor could I buy iBonds in an IRA, where most of my bond money resides. Three strikes and they were out. Thus I got rid of mine a few years ago. They do have some nice properties.

Note the three reasons. I could add a fourth, which is related to the second reason. For many years the i-Bonds available yielded 0 to maybe .1 over inflation, thus resulting in a guaranteed loss after taxes. For a long term investment, I won't buy such an asset.

Since the i-Bonds incur no taxes until you sell, they can be treated as a tax-deferred account, except that unlike assets in an IRA, I can't easily sell them (without tax consequences) or buy more of them to rebalance or tweak the asset allocation. And again, a separate account that is harder to mark to market.

Overall, the hassle for me (versus your guess) is that I had this small account, where the financial benefits to me were slim to non-existent, that I couldn't quickly mark to market (I check my asset allocation periodically, including the mix of inflation protected versus nominal bonds). I had no trouble buying i-Bonds, nor did I have problems redeeming when getting rid of the things. Had the financial benefits to me been significant, obviously I would have kept them.

The concerns around getting the account locked and having troubles accessing the i-Bonds were a minor factor to me, though I did consider, as part of estate planning, whether I wanted my POA or executor to have to deal with this small account which might be more trouble to handle. But that was not a major consideration.

I-Bonds are a fine investment for many people; however they did not fit my needs very well. As I said, they have some nice properties.

Statistics: Posted by TN_Boy — Sat May 11, 2024 8:55 am — Replies 81 — Views 5395

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