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Inflation Dropped Off Fast
Series I Savings Bonds, normally a boring, little-discussed tool for savers, got a lot more attention in the past year with the spike in inflation. The interest rate these bonds pay
Why I'm Not Buying More I-Bonds Right Now
Summary
- Inflation dropped off much faster than I expected when I last wrote about I-Bonds in October 2022.
- The change in CPI over the last three months (the first half of the next I-Bond reference period) was just under zero.
- The fixed rate component of 0.4% is pretty stingy compared to real interest rates.
- CDs are a more competitive choice right now and can always be redeemed in a year to buy I-Bonds if inflation comes back.
I retired early after 22 years in the energy industry with roles in engineering, planning, and financial analysis. I have managed my own portfolio since 1998 and have met my goal to match the S+P 500 return over the long term with lower volatility and higher income. I mostly write on positions I already hold or am considering changing. I prefer to hold positions for the long-term unless there is a compelling reason to sell. I look for investment opportunities without regard to asset class, market cap, sector, or yield. I would rather maximize total return over time by buying when price is low relative to intrinsic value.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SYF, SERIES I SAVINGS BONDS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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