Benchmark Financial Design
Presents Mi Smart Moment
2358 S. Garden Ct,
Jenison, MI 49428

It's hard to believe we are already at July 1st. That means we are officially closer to Christmas 2022, than we are to Christmas 2021. So, if you still haven't taken your holiday lights down, leave them up. Instead of being late you are now early.

This is also the time of year when we assess how we have done as investment advisors. We seek if any adjustments should be considered to keep your portfolios in line with your long term goals. We're not implying that a date on the calendar is cause for making changes. However, with a year like this, more attention is needed.

One of the items that has caught our attention as of late are I bonds. While you may be familiar with corporate bonds, municipal bonds, or other government bonds like treasuries, I bonds have taken on new interest these days as inflation has come roaring back.

What is an I bond? An I bond is a treasury issued savings bond with a minimum purchase amount of $25 and a maximum of $10,000 annually (which could be increased to $15,000 if purchased with your federal tax refund). The bonds pay a combination of a fixed or stated rate along with an added rate for inflation. In addition, there are certain restrictions and penalties for redeeming the bonds prior to a 3-year holding period. If you want to know more click here: I Bonds

With fixed rates having been so low for so long, what is so special about an I bond today? For one thing, the current fixed rate (0%) plus a semi-annual inflation rate would allow you to purchase an I bond up through October, 2022 and lock in a 9.2% yield.

One of the uses for these bonds may be in the form of an emergency fund. Since we advise that emergency funds should be secure and not invested, a government backed bond may be a way to earn a higher interest rate than bank or CD savings. We also advise not to have your emergency funds subject to market risk, and made just a little bit harder to redeem to discourage impulse buying.

In case you are wondering, we DO NOT sell I bonds. They can be purchased directly from the government online or through a bank. However, we feel that knowing about this as an option for your money is something you should be aware of. For long-term growth, we typically do not favor bonds, but with the current rate of inflation sometimes you need to look at alternatives.

Thanks for reading,
Bernie & Chad

P.s. Happy Independence Day.
This week's Smart Moments: 7/1/22
OUT OF HERE! - Angels superstar Mike Trout hit 4 game winning HRs in a 5-game series with the Mariners that ended on 6/19/2022, becoming the 1st player in history to hit 4 game-winning homers in a series (source: MLB).
THE BUCKEYE - THE Ohio State University won its fight to trademark the word “THE.” The patent office initially denied the application, calling the word “merely decorative.” THE university fought back and won after three, June 24, 2022
"Inflation is taxation without representation."
  • James Thomas Kesterson Jr
Investment Advisor Representative of and Securities offered through Founders Financial Securities, LLC. Member FINRA, SIPC and Registered Investment Advisor.