For the 1% who have enough wealth to make diversification a good strategy and who have enough cash flow to make regular contributions to their investments then I could see having some in T-bills would make more sense than keeping the equivalent amount in cash.
For the rest of the 99% who don't have enough cash flow to make regular contributions to a portfolio, the strategy changes.
I recall Harry Browne's investment strategy for lazy investors, 25% cash, 25% long-term US treasuries, 25% in low fee S&P 500 index fund, 25% gold.
Each month or so buy whichever asset is the least expensive at that time.
Supposedly this generates between 10 and 12% year to year.
Of course this is for 'normal' situations, I don't know if Harry Browne would recommend the same strategy now.
Thank you Harry Browne, you were my first introduction to Libertarianism and you were also of the same mold as Ron Paul, humble and more interested in promoting the message than yourself.
Ron Paul: He irritates more idiots in fewer words than any American politician ever.
NO MORE LIARS! Ron Paul 2012
Rand Benedict Paul.
Not only did he sell us out, this douche bag did it to his own father! I'm more upset him selling his father out. I don't care who i think is going to win i would never sell my father out. If his willing to sell his father out what else is for sale?
He's a "professor" because he can't make it in the real world.
Harry was the first I read too more than 2 decades ago and Harry is still the ONLY 3rd party candidate to EVER get on the ballot in all 50 states. Here's Harry on firing line fending off 2 jerk off neocons and now of course we can look back and know that Harry was RIGHT
And I'm sorry but nobody has better election commercials than Harry Browne:
There's a place in one portfolios for bonds, but the yields right now are below inflation, I'd rather buy gold.
The Federal Reserve bought 61% of all treasuries last year. What more do you need to know?
tell your professor he is a morong.
..this is the darkest timeline..It was too weird to live, and too rare to die - hunter s. thompson .
I had a customer who sold all his coins just before the bear market began in 1981 and bought 30 year t-bills at something like 20%. Now THATS when you buy tbills!
Then again I have another customer who also sold out in 1981 realizing BIG gains and bought baseball cards from the 1800's that he's also made millions on. Neither one of them are professors.
If you think:
Inflation is a threat
Interest rates may rise
The stock market will rise in nominal terms
International, institutional money will begin to prefer foreign debt to US debt....
then skip on treasuries.
I think, however,
Interest rates are absolutely not going to go up significantly under any near-term circumstances
The stock market is going to have a major correction downward in the next year or two
Institutional money will prefer US debt even more relative to the debt of Europe and others.
Then treasuries are a great buy. I made 20% in a month last year during the European debt crisis. I see more European debt crises coming, so I'm going nowhere. Treasuries are negatively correlated with the DOW, generally. I'm confident the DOW will be lower in a year or two, probably by a large amount. It would be apocalyptic for the Fed to raise interest rates any time in the near future, therefore I don't fear them going up.
I'm sitting pretty, and y'all are laughing. I made 30% return in the past 12 months, and I expect the next 24 to be even better. I'm 100% in for treasuries. Debt-deflation is the name of the game.
I'm not advocating something akin to buying at the housing market high. I've been renting since '06, despite having 50+% of a home value saved. We're not at the bottom yet, so I'm holding. I held during last of the boom years, too.
Rights come from responsibilities. A right is what you need to discharge your obligations.
We should never talk about rights apart from responsibilities, for rights have no other source..