Economics With Financial Literacy

T-Bonds, Futures, and Money Market; The Dichotomy Between Aggressive, Moderate, and Conservative Investment.

An Analysis of 3 Major Economic Investments and Their Future.

Economics assignment 2.04 HONORS, by Sarah Knezel.

Despite the safety of this option- the use of it is going down; according to the national statistics, only about 10% savings are bonds, a staggeringly low rate- considering T-Bonds are extremely safe and conservative. So why don’t we want bonds? The US Gov’s treasury reports the cou20-34-editpon equivalent (which is the ultimate comparison figure for nominal and discount rates), the rate is far less than the US’ inflation rate of 2.07%; except for the 13th week, there has been a general decrease in interest, making bonds an irresponsible pick in regards to what you get back. The future of government bonds looks bleak and practically nonexistent, notwithstanding its major security benefits.

The main issue with futures isn’t the futures themselves but finding information on them. Futures are high-risk private contracts between sellers and buyers, ensuring one will buy a large quantity of a product from the other at a set rate. An example of this would be you predicting a large boom in the cow population sometime next year, and signing into a future agreeing to buy a 350 dollars-worth of milk for 200 dollars. What makes this risky is that it’s an actual gamble, despite this, they do not seem to be uncommon. The fascination surround futures is the fascination of legalized betting and gambling.

Money markets are the very definition of a moderate investment option, they’re the ultimate moderate option, for high payments they offer a higher rate of return, such as anywhere from .8 to .11%, this accounts for their growing popularity in recent years. In Europe, 2009-2010, the average investor with a money market account increasedImage result for money market figures their payments from 0.59 to 0.85 percent which is no surprise considering money markets accounts persistence on keeping a competitive interest rate.

 

SOURCES:

http://www.investinginbonds.com/learnmore.asp?catid=9&subcatid=50&id=97https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=billrateshttps://www.statbureau.org/en/united-states/inflationhttp://www.bankrate.com/finance/investing/treasury-bonds-pay-interest.aspxhttps://www.personalcapital.com/blog/investing/america-turns-back-bonds/https://www.treasury-management.com/article/4/198/1710/the-continuing-popularity-of-constant-nav-money-market-funds.htmlhttps://www.fdic.gov/regulations/resources/rates/