As inflation soared in 2021, so did the rate you could earn risk-free on government I-bonds. I originally wrote about the benefits of these in January of last year. Later in the year, the starting interest rate peaked at nearly 10%. There was so much consumer interest in buying them, that the treasury website crashed the day before interest rates reset lower.

With inflation starting to come down, I have gotten a few questions about whether these bonds are still attractive…

Last year around this time I published an article, Potential Pitfalls In Bond Investing. What followed was the worst year for bonds in decades. I’d like to think I timed the article perfectly, but it was more a coincidence than anything. I watched over the years as the bond market composition changed dramatically, particularly the average maturity of bonds increasing by over 50% from 4 years to 6+ years in the past decade.

This resulted in a painful year for passive bond owners this year as long-term bonds got hammered. I wanted to reshare the post because the principles still apply as you consider how to invest in bonds going forward…