I don’t have a stomach for Jan. 2022 stock declines watching the values of great companies plummet on a daily basis, although I still have plenty of money invested in great companies and will weather this storm. I am wondering about putting some $$ into I Bonds thru Treasury Direct? They are currently paying 7.12%, and it would be some discretionary income to try this out? I know nothing about bonds really, but this does seem appealing to me as a hedge against this inflation. Thoughts?
They’re great. But you can only do $10k per SS number or Tax ID, so limited.
We bought our allocation for the year already.
1 Like
Realize that if you buy anytime in the month, you get interest as though you bought on the first of the month, (if I have understood this correctly.) So it matters that you figure this out before February rolls around.
IP,
who has our I bond allocation for 2021 and 2022, with both of our kids putting emergency money in as well
1 Like
Hi Petrus,
Here is a great website that addresses your question:
https://tipswatch.com/2022/01/04/i-bonds-a-very-simple-buyin…
David Enna is a guru of all things related to government bonds. Unfortunately, the real yield of TIPS has been negative for quite a while, but I-bonds are still a good solid investment IMHO. I max out the yearly limit for my wife, myself, and our trust every year.
Good luck
DT
ANSS, TXT Ticker Guide
Click on my board name to see a list of my holdings
2 Likes
…watching the values of great companies plummet on a daily basis…
…currently paying 7.12%…
I’ve seen several downturns in the “stock market” in my life, at least 2 with significants amount of money invested, i.e., well into 7 figures. I understand that queasy feeling of watching large chunks being lopped off your portfolio value. However…when things get irrational, you can find extraordinary deals. Those great companies, if nothing has changed about their earnings, debt, etc., etc., are still great companies. Look at this as a clearance sale. I’ve bought great companies that their prices dipped so much that their dividend yield was temporarily in the 7-10% range. Some rebounded within a year, others took 2 or 3 years. I got paid a handsome, consistent dividend to wait.
JLC
1 Like
've seen several downturns in the “stock market” in my life, at least 2 with significants amount of money invested, i.e., well into 7 figures. I understand that queasy feeling of watching large chunks being lopped off your portfolio value. However…when things get irrational, you can find extraordinary deals. Those great companies, if nothing has changed about their earnings, debt, etc., etc., are still great companies. Look at this as a clearance sale. I’ve bought great companies that their prices dipped so much that their dividend yield was temporarily in the 7-10% range. Some rebounded within a year, others took 2 or 3 years. I got paid a handsome, consistent dividend to wait.
JLC
Ad yet “if nothing has changed…” can’t be known until AFTER the fact. Did we know that the Fed would do the unprecedented in 2008 to prevent a Depression? Did we know that they Fed would do more of that in 2020 when we really didn’t know what Covid would do to corporate earnings and ability to pay debt. When the next crisis comes along, do we know that the Fed will or even can do it again? We do not.
1 Like
When the next crisis comes along, do we know that the Fed…
Is IHOP still selling pancakes?
There is a little bit of after the fact in some cases. With the COVID crisis, investors freaked out about various REITs, especially retail REITs, so their prices tanked. About 6 months later, there were a few still collecting 95-98% of their rents on time, i.e., nothing changed. So I scooped up some shares with yields in the 8-9% range. Now, basically 2 years later, they are essentially back to pre-COVID share prices.
Back in 2008, bought PG, JNJ, MMM, PEP, and several other dividend aristocrats* at discounts. These companies had been around the block several times and had been through similar situations before. As long as they paid their dividend and continued to increase it, didn’t care much about share price. There was little to no need to see if nothing had changed.
JLC
- stocks that have paid dividends for 25 years and have a yearly increase in the dividend.