Women & Money: Fixed-income strategies for a fearful time

0 Comments | Philadelphia Inquirer, The, June, 2008 | by Suze Orman Inquirer Columnist

You don't need a Ph.D. in mathematics to understand that the numbers aren't working in your favor these days. The Fed's aggressive easing of the federal funds rate has made a mess of your cash and fixed-income strategies. The most aggressive bank savings deals pay out little more than 2.5 percent to 3 percent right now.

Given that the official inflation rate is around 4 percent, you're pretty much guaranteed a negative real rate of return. I'm hearing from more and more of you that you're shifting from CDs into 10-year Treasuries, where the yield is about double what your bank might be paying out. Please be careful when extending into longer maturities - you're exposing yourself to locking in a low rate of return. Given the inflation rate, that's a bad place to be once the...