Consider Savings Bonds
With stocks recently soaring, who wants something as conservative and boring as savings bonds? Smart, long-term investors, that's who! Often available through one's work or bank, savings bonds provide assured returns over the decades.
They have these characteristics or benefits:
- Varied (EE Series, 3.2%, and Inflation-Indexed, 6.73%, recently) but quite dependable returns.
- Easy savings as part of a regular plan for setting aside funds in the safest way.
- A balance for riskier types of investment, for instance stocks, which may, on average, have better returns but can fluctuate dramatically and, indeed, can be down or essentially static for 15 years or more.
- Accessible in an emergency without risk to the initial investment.
- When held to maturity, can provide a gratifyingly tidy sum. $1000 put into savings bonds in 1965 would have had an estimated value of $9500 in 2005, per Mark Zandi, of Moody's Economy.Com.
A common error is to think that savings bonds are only for bottom rung employees whose earnings are at or just above the poverty level. In fact, they are instead typically held by conservative but reasonably well off workers and retirees with annual incomes more at the higher end of the spectrum.
If wanting a well-balanced investment portfolio, think about regularly putting a portion of your funds into US savings bonds. The time may well come when you'll be glad you did.
(Thanks much to Evelyn and Ann for information or articles that inspired some of this issue's saving and investment ideas.)