2-year Treasurys
Terry,
My financial advisor is recommending I take 50% of my IRA, which is currently invested conservatively in the JPMorgan Managed Income Fund (the fund is one step away from cash). He suggested I put it in 2-year Treasurys or a 1-5 year Treasury ladder to get more income. With $31T in debt, I am concerned we aren’t far away from the U.S. not being able to service its debt. Risking 50% of my IRA could be disastrous if we have had an illiquid or collapsing Treasury market. I am interested in your thoughts about the country’s level of debt and the implications of investing in longer term Treasurys.
Terry Says
First, stop reading those horror stories. The U.S. Treasury market is not going to become illiquid! And it is not going to collapse.
Second, I agree that a Treasury ladder is a good idea. But the Treasury does not act as custodian for IRA accounts. You may have your IRA in the brokerage division of Schwab, Fidelity or Vanguard. I understand that you can buy Treasuries in an IRA via their brokerage division. So if you advisor handles your account using these firms, he may be able to get it done for you.
