Last week, the yield on the 10-year U.S. Treasury bill fell to an all-time low of 1.53%.
Who do you know that you would borrow money to for ten years at an interest rate of 1.53%? In spite of the record low interest rates, the largest investors in the world are buying as many U.S. Treasury bills as they can afford.
U.S. government debt is guaranteed by the U.S. Treasury. Right now, compared to the safety of anything else that you can own (gold, oil, currencies, stocks, bonds), the smartest investors in the world are comfortable with an investment return of 1.53% for ten years.
Maybe it is time for you to think about owning the same thing in your Minnesota company 401(k) retirement plan account.
There is a huge level of fear with investors now. Not just U.S. investors, but the largest and most sophisticated investors in the world are also concerned about the safety of their money.
The money market account option on your company retirement plan account menu invests in U.S. Treasury securities. If you have any of your company retirement plan account money invested in that option now, you are investing the same way the smartest investors in the world are investing right now.
Even the “smart money” is scared now. Stock and bond markets all around the world are historically uncertain.
Professional investors do not want to take any risk right now. These professionals don’t care about the return ON their money. Instead, they care about the return OF their money.
The ultimate investment fear is that you will lose money in what you are invested in. Right now, professional investors have the ultimate fear. When they invest a dollar, they want a guarantee that they can get their dollar back.
Sit down and take a look at how much risk you are comfortable taking in your company retirement plan account. My guess is that you are currently taking more risk than most individual investors should be comfortable with.
Ric Lager
Lager & Company, Inc.
