Treasury Bills - A Recession-Proof Investment?

Updated: Nov 9


Many people are wondering if now is a good time to invest in treasury bills, given the current economic state of the world. Treasury bills, also known as T-bills, are short-term debt securities that are issued by the government. They typically have maturities of one year or less, which makes them attractive to investors who are looking for a safe place to park their money during periods of economic uncertainty.


How Do T-Bills Work?


When you purchase a T-bill, you are essentially lending money to the government for a set period of time. In exchange for loaning your money, the government agrees to pay you interest when the T-bill matures. T-bills are sold at a discount to their face value, which is the amount you will receive when the T-bill matures.


T-bills are considered to be one of the safest investments because they are backed by the full faith and credit of the United States government. This means that even if the economy takes a turn for the worse and deflation sets in, your investment will still be worth face value. Additionally, since T-bills are sold at a discount, you will always earn a positive return on your investment regardless of what happens to interest rates.


Why It Could Be Good To Invest in T-Bills During a Recession?


Investing in T-bills during a recession can be a smart move for several reasons.


Treasury Bills Are Backed By The Full Faith & Credit Of The US Government


First, as mentioned earlier, they are backed by the full faith and credit of the US government so you know your investment is safe.


Stability and Predictability of T-Bills


Second, they offer stability and predictability during an uncertain times. When stocks are fluctuating wildly and bond prices are all over the place, T-bills provide a nice anchor for your portfolio.


Short-term


Third, since they mature quickly, you will not have to tie up your money for very long if you need it for other purposes.


Virtually "risk-free"


Finally, unlike other investments such as stocks or bonds, there is no risk of losing money on your investment in treasury bills. Plus, if inflation does occur during the recessionary period, your investment will actually increase in value due to the higher interest payments you will receive at maturity.


Treasury Bills, A Recession Favorite For Many


If you're looking for a safe and predictable investment during these uncertain times, treasury bills may be just what you're looking for. With maturities of one year or less and guaranteed interest payments, T-bills offer investors peace of mind knowing that their investment is safe and sound. So don't wait - now may be the perfect time to invest in treasury bills!


Got more questions? Contact us at www.lyonbern.com


Lyon Bern, LLC is a Registered Investment Adviser and is in the business of consulting and advising its clients in wealth and asset management. Each client's diversification between Lyon Bern's portfolios will be made individually and based on the client's Investment Policy Statement. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product referred to directly or indirectly in this document will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Lyon Bern, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional investment advisor. A copy of our current written investment advisory agreement discussing our advisory services and fees is available for review upon request.