Treasury Bond ETF vs. CD
For some of the money in my retirement account, which is better: a 20 yr treasury bond ETF or a CD?
Terry Says
Well, I wouldn’t suggest buying an ETF that concentrates on 20-year treasuries, unless you are convinced that interest rates won’t go higher! When interest rates rise, bond prices fall. And that applies to the prices of ETFs that own long-term bonds.
So they are not remotely comparable to CDs, which are very short term!!
You need to look at your entire asset allocation within your IRA — And that decision depends on how far you are from retirement, how much risk you can tolerate before you panic, etc. If you’re already retired, you need a greater portion of “chicken money” — money market mutual funds inside your IRA. But you also need some stock market exposure to grow your IRA over the years ahead.
So I can tell you that those are not comparable investments you gave me, but I can’t tell you how to allocate your IRA!
