investing

Inflation-fighting alternatives to I bonds

Treasury mutual funds, ETFs can be viable options
Next
2 of 9
Back
text

Mutual funds and exchange-traded funds, or ETFs, tied to Treasuries are baskets of short- and long-term Treasury bonds.

The upside: Treasuries are backed by the full faith and credit of the U.S. government, so investors don't have to stay up nights wondering if they'll default. Also, because their value tends to go up when the economy is struggling, they tend to move in the opposite direction of stocks, providing a useful counterweight in your portfolio, says David Loeper, chairman and CEO of Wealthcare Capital Management in Richmond, Va., and author of "Stop the Investing Rip-Off."

The downside: Treasuries rarely realize high yields, but right now yields are particularly low while prices are higher than normal.

If interest rates go up quickly, the value of long-term Treasuries can nose dive, says Richelson.

Bottom line: For long-term investors, Treasury mutual funds and ETFs offer a viable option for a portfolio's fixed-income component that outperforms inflation and protects investors in crises, says Loeper.

"Whenever we've had a major decline in equities, there's a flight to safety," which causes Treasuries to increase in value, says Loeper.

Just be sure that any fund or ETF you buy has a low expense ratio and low fees, he says.


 

 

advertisement

          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

How should my teen invest $150K?

Dear Dr. Don, My son will turn 18 years old in December. He has $150,000 from a settlement now sitting in the bank. What is the best plan to pursue for investing this money? Is investing in precious metals a good way to... Read more

advertisement

Blog

Dr Don Taylor

Earnings season, investing and you

Should individual investors try to anticipate financial results in an earnings report?  ... Read more

Partner Center
advertisement

Connect with us