When Is The Time To Sell US Savings Bonds

Post on: 4 Сентябрь, 2016 No Comment

When Is The Time To Sell US Savings Bonds

Your investment goals when investing in US savings bonds will dictate what strategy you implement. Your tax status, risk-tolerance, and time frame for investing will have an important role in which avenue you pursue.

Your bond investment strategy should also take into account the importance of diversification. It is generally not a good idea to put all of your capital into one singe investment or asset class. A bond portfolio can be diversified among several different types of bonds, each with their own characteristics.

US savings bonds have traditionally been popular investment vehicles, as there is no risk of default as the bonds are backed by the full faith and credit of the US government. If you have purchased or received savings bonds as investment you may be wondering when is the time to sell US savings bonds?

When Is The Time To Sell US Savings Bonds: Buy-And-Hold Vs Total Return

When you sell your savings bond will depend on your investment strategy and circumstances. If you are interested in preserving your wealth, and earning interest payments, a buy-and-hold strategy with US savings bond is usually best.

A buy-and-hold strategy means that you do not need to be too concerned with the rise and fall of interest rates. As your strategy is to hold the bonds for a longer time frame, the issue of when is the time to sell US savings bonds, is not a critical is if you are utilizing a total return strategy.

A total return strategy will combine capital growth and preservation, as well as income, but also requires a more active trading strategy and careful attention to economic and interest rate issues. A total return investor will look to purchase a bond when the price is low, and sell when it rises rather than hold it to maturity.

When Is The Time To Sell US Savings Bonds?

You may encounter an unexpected financial emergency that may change your buy-and-hold strategy. You may need to sell a bond prior to its date of maturity because you need the principal. While it is always best to maintain your buy-and-hold strategy, life can be unpredictable and you may need to access your cash.

If you cash in a Series EE bond before it is five years old, you will forfeit the last three months of interest. If your savings bond was issued before May 1, 1997, it will generally earn interest every six months. It is advised that you cash in bonds with semiannual interest payments just after the interest payment date.

When is the time to sell a US savings bond? You may want to sell your bonds to realize a capital gain. You may have decided that it is better to realize a gain rather than hold the bond to maturity. Your unique financial situation will dictate the most effective strategy for you.

Many investors find that by purchasing bond funds online at major brokerages such as ETrade. that they can utilize the convenience of online trading, and enjoy the easy of stock-like tradability that these funds have to offer.

Always consult with a trained financial adviser before making any investment decisions, as your unique circumstances will affect the course of action you will need to take.

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