My mom is a 70 year old widow and has a ridiculous amount of cash, far more than loose change, in her credit union's money market account. I've shown her how that with the current inflation targets that money isn't gaining .6% a year, it's losing much more, and how a few different bond funds behaved relative to the stock market in the big drawdowns of 2007, 2018, and this year and their subsequent recoveries.
Even without this money, her finances are highly stable and she is set for the rest of her life, income-wise. She thinks of this money as mine, but I don't, it's hers, and she doesn't want to play equities at all and I respect that. I know what I'd do with it if it were mine (TSLA 1/22 1000c, duh) but I also know that even the modest returns of a low-cost Vanguard bond fund will be far superior than it sitting in a savings account.
I've seen it written here that with rates the way they've been since March, the only way to really make money is equities. But if you just want to stay ahead of inflation, are bonds all that bad? Are some bond types worse than others for the present moment? How do I assess what bond type is best?
Submitted December 23, 2020 at 01:34AM by I_am_the_birds https://ift.tt/2Jd6rjS
