Page 9 - Jupiter Spotlight - February '24

Jupiter Spotlight, Page 9
Financial Focus
Treasury Bonds: Still Safe For
Investors
By Sally Sima Stahl
You may have read
reports about an impending
“debt crisis” in the United
States. Should you be
worried about investing in
Treasury securities?
Part of the concern
over debt has been driven
by the cost of government
borrowing, which has risen
because of higher interest
rates. But it’s worth noting that while interest expenses have
risen to nearly 2 percent of gross domestic product (GDP),
this measure had exceeded 3 percent in the early 1990s.
®
So, while the upward trend of federal debt could prove instance, you might pay $4,700 for a 13-week T-bill and get
problematic down the road, the claims of a current crisis may
$5,000 back at the end of the three months.
be overblown. And Treasury securities are still considered When investing in Treasury securities, you’ll want to keep
among the safest investments in the world, as they are secured these features in mind:
by the full faith and credit – that is, the ability to borrow and • Price fluctuation – While your interest payments will
tax – of the United States. always remain the same, the market value of your Treasury
In any case, if you haven’t invested in Treasury securities, security can change. So, you might not get face value for a
you’ll want to know the basics. First of all, when you purchase Treasury bond if you sell it before it matures, particularly
a Treasury security, you’re lending money to the federal if market interest rates are higher than the rate you’ve been
government for a specific period of time. receiving. Because longer-term bonds have more payments
Here are your purchase options: left to make than shorter-term ones, they are more sensitive
• Treasury bill – Typically matures in four, 13 or 26 weeks, to interest rate changes and market price fluctuations.
although some have maturities of up to a year • Taxes – Interest income from Treasury securities is
• Treasury note – Matures in between one and 10 years subject to federal income tax but exempt from state and
• Treasury bond – Typically matures in 10 to 30 years local taxes.
When you buy Treasury notes or bonds, you receive In addition to the traditional Treasury bonds, bills and
semiannual interest payments, but when you purchase a notes, another option is available: Treasury Inflation-
Treasury bill – a T-bill – you generally buy it at a discount, Protected Securities (TIPS). Unlike other Treasury
and when the bill matures, you receive its face value. So, for securities, in which the principal is fixed, the principal of
a TIPS can move up or down, based on movements in the
Consumer Price Index for Urban Consumers (CPI-U). Once
your TIPS matures, if the principal is higher than the original
amount, you’ll get the increased amount; if the principal
is equal to or less than the original amount, you’ll get the
original amount. TIPS pay a fixed interest rate semiannually
until maturity, but because interest is paid on the adjusted
principal, the amount of your interest payments can vary.
As with other Treasury securities, you can hold a TIPS until
maturity or sell it before it matures.
Don’t let scary or gloomy predictions discourage you from
considering Treasuries – they remain a good option as part
of the fixed-income portion of your investment portfolio.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward Jones,
Member SIPC.
Edward Jones is a licensed insurance producer in all states
and Washington, D.C., through Edward D. Jones & Co., L.P.,
and in California, New Mexico and Massachusetts through
Edward Jones Insurance Agency of California, L.L.C.;
Edward Jones Insurance Agency of New Mexico, L.L.C.; and
Edward Jones Insurance Agency of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors cannot
provide tax advice. You should consult your qualified tax
advisor regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, AAMS,
1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
Jupiter Senior
Softball
The Jupiter Senior
Softball Association’s
2024 Winter League,
featuring a record 15
teams competing in
three divisions, began
Jan. 8 and runs through
the end of March.
A total of 187 players
turned out for the league,
which is the cornerstone
of the year-round
slow-pitch softball
program. There are six Commissioner Paul Storch
games every Monday,
Wednesday and Friday morning at Maplewood Park.
Persons 55 and older are eligible to join and there is
no upper age limit.
As the competition began, League Commissioner
Paul Storch said, “Everybody is looking forward to
having a fantastic time over the next approximately
three months. We have more players than we’ve ever
had.” And more continue to sign up, he said.
The league’s three-division format allows games
for more competitive players as well as those desiring
a more relaxed style of play. After the winter league
ends pickup games are held the remainder of the year.
The senior softball program is sponsored by
the nonprofit Jupiter Senior Softball Association
in cooperation with the Town of Jupiter’s Parks &
Recreation Department.
For more information about the softball program,
including sponsorship, or to register, contact Gary Newman
at (917) 623-0791, or go to www.leaguelineup.com/jssa.