Ask the
Expert
The Scoop On Treasury Securities
Can you explain the differ-
ent U.S. Treasury securities
and how I can buy them?
Answer: Investors looking for "safe-
ty-first" need to understand the differ-
ences among Treasury bills, notes and
bonds.
Treasury
bills are short-
term instruments
with maturities
of no more than
six months.
Treasury bills
function like
zero-coupon
Norton Stern
bonds. Investors
Columnist
buy bills at a dis-
count from the
par, or face, value and then receive the
full amount when the bill matures. The
minimum investment is $1,000. It is
offered at 4-week, 13-week and 26-week
maturities.
Treasury notes are intermediate-to
long-term investments, typically issued
in maturities of two, five and 10 years.
Treasury notes are $1,000 minimum
and interest is paid semi-annually.
Treasury bonds cover terms
of more than 10 years and are cur-
rently issued in maturities of 30 years.
Treasury bonds are $1,000 minimum
and interest is paid semi-annually.
You don't actually receive a certificate
when you buy a Treasury bill, note or
bond. Your investment is tracked in a
book-entry system of accounts that
Q
Rabbi Addresses Caring
Rabbi Irwin Kula, recently ranked No.
7 in Newsweek magazine's "Top 50
Rabbis in America;'
will present the key-
note address at the
Jewish Family Service
80th annual meeting,
Tuesday June 3.
Speaking on
"Yearning to Serve:
The Practice of
Rabbi Kula
Caring," Rabbi Kula
will address issues of religious ritual vs.
the actual practice of caring; defining
ourselves by giving or doing; and how
the practice of caring affects the way we
treat our family and others.
Rabbi Kula is president of CLAL, the
National Jewish Center for Learning
and Leadership, a leadership training
generates a confirmation and periodic
statements.
Treasuries can be bought and sold
through an investment professional, a
commercial bank or an on-line broker.
There often is no commission charged
for buying or selling Treasury securities.
Dealers earn a profit by buying bonds at
one price and selling them at a slightly
higher price.
Some individuals prefer to buy new
issues directly from the government at
auction. After opening a Treasury Direct
account with the Treasury, you can
actually participate directly in Treasury
auctions.
Inflation-indexed securities. In
1997, the Treasury introduced notes
and bonds in a new form designed to
protect the investor from the effects
of inflation. Using the Consumer Price
Index-Urban as a guide, the value of
the principal is adjusted to reflect the
effects of inflation. A fixed interest rate
is paid semi-annually on the adjusted
amount. At maturity, if inflation has
increased the value of the principal, the
investor receives the higher value. If
deflation has decreased the value, the
investor nevertheless receives the origi-
nal face amount of the security.
Here's a hypothetical example of how
inflation-indexed securities work. Let's
say $1,000 is invested in January on
a new 10-year inflation-indexed note
paying 3 percent interest. At mid-year,
the Consumer Price Index-Urban indi-
cates that inflation has been 1 percent
institute, think tank and resource center.
He is a faculty member of the Wexner
Heritage Foundation.
The Jewish Family Service annual
meeting will begin at 7 p.m. with a des-
sert reception, followed by the program
at 7:30 p.m., at the Jewish Community
in West Bloomfield.
In addition to the election and instal-
lation of officers, awards will be present-
ed to the JFS volunteer and mentor of
the year as well as to the JFS employee
of the year.
There is no charge to attend, but
reservations are required and may be
called in to Lori Drucker, (248) 592-
2339, or e-mail Ldrucker@jfsdetroit.org .
Diane Orley and Judy Stern are annu-
al meeting co-chairs. Sandy Muskovitz
Danto is nominated to serve an addi-
tional term as president.
Your Cellular Superstore!
during the first six months. Principal
is adjusted upward to $1,010 and the
interest payment (one-half of 3 percent)
is based on that figure. The payment is
$15.15. At the end of the year, the index
indicates that inflation was 3 percent,
which brings the value of the principal
to $1,030. The second interest pay-
ment is $15.45 ($1,030 times 3 percent
divided by 2).
Although treasuries are considered
free from credit risk, they are subject to
other types of risks. These risks include
interest rate risk, which may cause the
underlying value of the bond to fluc-
tuate, and deflation risk, which may
cause the principal to decline. There is
no guarantee as to the market value of
these securities if they are sold prior to
maturity or redemption.
As always, consult your tax advisor
or other investment professional before
making any investment decisions.
❑
Norton Stern is a Registered Principal
with Franklin Financial Investments, LLC,
Southfield (248-262-8810). Investment
products and services are offered through
Wachovia Securities Financial Network,
LLC, member FINRA/SIPC. The opinions
expressed are those of the author and not
necessarily those of Wachovia Securities
Financial Network or its affiliates. The mate-
rial is distributed solely for informational
purposes and is not a solicitation to buy any
security or instrument or to participate in
any trading strategy.
JWV Plans
Poppy Sales
The Department
of Michigan Jewish
War Veterans of the
USA and Ladies
Auxiliary will
be joining other
Michigan veterans
for the annual poppy sales during May.
Funds collected will be used to ser-
vice patients in all Michigan veteran
medical facilities and for scholarships to
assist descendants of veterans.
The JWV organization has no paid
workers, so, all money collected is used
to assist veterans and their families, as
needed, without regard to race or reli-
gion.
with Jennifer Babby
Wireless My:. Manager
My
grandson
is about
to go
ollege
and he wants
one of those
new fangled cell
phones with all the gadgets. I still
use a rotary phone and I don't know
anything about cell phones. Where
do I go?
Come in to the nearest
Wireless Toyz location. Our
ertified Wireless Expertz
knows everything you need to know
about the phones, rate plans and
accessories you (and your grandson)
need.
Okay, I see a Verizon
commercial on TV and they
look good. Then I see a
Sprint tmmercial on TV and they
look good. I don't have the time to
run around to a bunch of different
stores looking for the best phone.
What can Wireless Toyz offer me?
Wireless Toyz has all of the
major cell phone carriers
nder one roof, so your
options are only a few feet, not miles
apart.
Direct your questions to:
asktheevertz@wirelesstoyz.com
and visit the nearest locations at:
Jennifer Babby @ 12 Mile & Northwestern
248.945.0090
Elizabeth Price @ 10 Mile & Evergreen
248.948.5000
Sandy Maizi @ Orchard Lk. & Telegraph
248.253.1400
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1368850
May 8 2008
A45