Lots of inflation discussion about bond rates, CDs which should never be purchased, and maybe unrealistic expectations about future inflation.
Here is a really cool web site for those who want to play around with Bond ETFs and interest rate / return risk bond ladders
iBonds Ladder Tool | iShares – BlackRock
There are graphics attached, I just couldn't fit a screen shot without requiring glasses on one picture. ..
You can pick different types of bond ETFs,
Treasury, Municipals, Corporates, High Yield
Then you can pick the amount of the portfolio, maturity, and get portfolio statistics, along with a graph showing you the ETFs and where they sit on interest rate curve.
Bonds are much different than equities, as they have fixed interest payments over a specific period of time. The price to pay for that fixed interest payment stream has two components:
credit risk, which is the risk of getting the bond face price back at maturity, and
interest rate risk, which is the fluctuation of demand for that payment stream at any particular price and point in time.
Interest rate risk only affects the current price and the longer the maturity, the greater the fluctuation in price. As the time to maturity becomes very short, the market price converges with the maturity value of the face price or value at redemption. If the bond is held to maturity, then daily market fluctuations are meaningless, and the only risk is credit risk, and if you will get all your money back, simply stated: a probability assigned to getting the face value back at maturity. . .
For small accounts, < $10M treasuries are the best starting point, and then increase returns with corporates and longer durations, but never longer than your expected life span, which is yes, uncertain.
The future is always uncertain, sometimes more uncertain that at other times.
enough for now,