You may have read reports about an impending “debt crisis” in the U.S.
Should you be worried about investing in Treasury securities?
The upward trend of federal debt could prove problematic down the road — but the claims of a current crisis may be overblown.
And Treasury securities are still considered among the safest investments in the world, as they are secured by the United States’ full faith and credit — that is, the ability to borrow and tax.
You can purchase Treasuries as notes, bills, or bonds, all of which have different maturities.
When you buy Treasury notes or bonds, you receive semiannual interest payments, but when you purchase a Treasury bill - a T-bill - you generally buy it at a discount, and when the bill matures, you receive its face value.
There are also Treasury Inflation-Protected Securities, or TIPS, in which the value of the principal is indexed for inflation.
Don’t let scary or gloomy predictions discourage you from considering Treasuries - they remain a secure option as part of the fixed-income side of your portfolio.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
