What Are High Yield Treasury Bonds?
Investing in bonds add diversification to anyone's portfolio, and any portfolio should have a percentage set aside for various bonds. An aggressive (growth) portfolio should have less, from 0 percent to 5 to 10 percent, depending on your objective. A conservative or retirement portfolio should aim at 25 to 30 percent bonds. Treasury bonds are a great edition. They are safe and can offer a modest yield.
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Identification
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A Treasury bond is a coupon that is debt bearing, which is issued by the U.S. government. This bond is back by the government's full faith and credit. These bonds are usually 7+ years to maturity (collection date) and pays a dividend every six months. Investments range from $1,000 to $1 million.
Time Frame
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Treasury bonds have maturity of 7, 10, and 20 years. 30-year bonds are available and are often called "long bonds."
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Benefits
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Treasury bonds are a safe way of investing. Unlike corporate bonds, the likelihood of the U.S. government defaulting on the bond is low. Furthermore, they can add diversity and low risk investments to a portfolio.
Considerations
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Try investing in a Treasury bond exchange-traded fund (ETF). These funds trade like stocks and offer exposure to bonds without actually investing in the bond itself. Most of these ETFs offer dividends, and you do not have to hold the ETF to maturity.
Warning
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Please consult your financial adviser or planner. All investments contain risk. It is possible to lose your money.
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