This has been bugging me every once in a while for a year or so. Some guy asked where he should park his cash for no risk for about 6 months. I replied BIL or SGOV have essentially zero risk as long as you hold for 3+ months. Some person claimed to “do this for a living and if I have to explain to you how interest rates work, it’s over your head” when I insisted even on the worst case scenario, he’d still not lose anything after 6 months. This person disagreed again and I got down voted and he got upvoted. So what is this scenario? Short term interest rates spike to 45%?! Even then the laddered t bills would compensate. I’m sure there is a scenario that involves nuclear war and entire currency collapse, but is there a “unprecedented” scenario that seems plausible although unlikely in missing. I understand inverse basic bond price/yield. I buy a 3mo t bill and rates go from 5% to 10% overnight the next day, I’ll “lose” money in the value of the bond, but if I hold for 3 months, it all comes back. What am I missing?   submitted by   /u/rithsleeper [link]   [comments]