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Author: math999man Big red star, 1000 posts Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: I Bonds with 1.00 - 1.10 % fixed rate Date: 11/3/2006 1:05 PM
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I recently reviewed my treasury I bond holdings and discovered that 80% of the cash I have invested in I bonds are locked into I bonds with fixed rates between 1.0 and 1.1%.

The next question I asked is- what inflation rate is needed so that the combined fixed and inflation rates is greater then a bank CD.

Using the equation provided on the treasury web site that shows the relationship between inflation rate and fixed rate, I reverse calculated a required inflation component of approximately 2%.

I don't see this occurring in the foreseeable future, as the Fed is determined to keep inflation under control.

I'm therefore considering cashing in my government I bonds to reinvest in CDs, payoffs a small amount of margin I have in a brokerage account, and invest in some stock opportunities.

I'm posting this just to encourage others to review their I bond holdings and consider other options as I have done.
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