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Author: BenHacker Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35646  
Subject: Re: 10 year treasuries Date: 12/27/2013 11:23 AM
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Notice at the end of the article the guy says "People are not going to set up new positions right now based on this number,"
Why not? 3% guaranteed safe isn't bad, eh?

Just a note that the 3% is guaranteed rate of interest or coupon the bond pays. The other guarantee is that you will get your investment principal back (assuming you buy the bond at face / par) in 10 years.

The only issue is that unlike a CD, you have no guarantee of what you can sell the bond for in the interim. If interest rates go up 2% next year, that 3% won't seem so good, but you'll be stuck with it because your bond will drop >10% in value to compensate new owners for the new higher interest rate paradigm.

In the case of a CD you can pay a fee to get your money out, but that is not the case in the bond market... the market sets the rates and you take or leave them.

Most brokers should be able to buy treasuries directly. Just call them and ask how and what they charge in commission and/or spread fee.

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