Expert: Steve Hach - 10/4/2011

Question
Hello Sir,
I have a question about short term and long term
government securities.

Q. Among U.S treasury bills and long term government bond, which one will be safest investment?

Sir read many times that both are fully backed by government and thats true but in camparison to eachother which will be the safest and beneficial also.
Thanks!

Answer
Hi Sonia,

I think this is a semantic language problem perhaps.

All of the US Government securities are backed by the US.

Typically "long bond" is used to talk about the longer-term bonds.  For example, the 30 year bond.

When you hear "t-bill" it is usually in reference to the short-term US backed bonds like the 1-year.

I would say that all of them are "safe" in that they are all backed by the full faith and credit of the US government.

How "beneficial" they might be is dependent on economic conditions over time and thus it is very hard to predict things the further into the future you go.

Google has more here:  http://en.wikipedia.org/wiki/United_States_Treasury_security

Best,

Steve