I’ve noticed an array of articles exclaiming that savings bonds, including both the Series EE savings bonds and the Series I savings bonds, beat stocks over the past ten or fifteen years. Nearly every time I make my way into one of these essays or news stories, I just shake my head because the surprise displayed by the men and women penning these pieces indicate a complete lack of competence. Those of you who have any experience managing money or with history immediately know my objective: No asset class, per se, is sacrosanct. What matters is the price you pay for the asset relative to how much underlying cash it generates.
Since the time they were first issued in the 1930’s, savings bonds have proven to be one of the most popular ways for individual bond investors to save money and compound their wealth, while simultaneously financing the nation’s budget. Although the first savings bonds series A, B, C, and D were well received, it was the Series E bond, or the war bond, as it was known, that became the mostly widely held security in the history of the world. In fact, it was the E savings bond that gave citizens of the United States and moral and financial interest in winning the war, turning a foreign conflict into a direct, and powerful, reality.