Should I put my nest egg in a 30-year Treasury bond?

A 30-year Treasury bond is backed by the full faith and credit of the U.S. government, which addresses credit risk but not the other risks that matter to a long-term investor. The most significant is duration risk: because the bond's coupon is fixed, its market price moves inversely to prevailing interest rates, and the longer the maturity, the sharper that sensitivity. A bond bought today can lose substantial market value if yields rise before it matures.

The other consideration is opportunity cost. Locking in a fixed yield for three decades means forgoing returns that could come from other assets over that stretch, including periods of higher inflation. If price growth outpaces the bond's yield, purchasing power erodes even though the principal is repaid in full.

What to watch: the direction of long-term yields, inflation expectations, and the gap between the 30-year yield and shorter maturities. These signals help frame whether a long-dated bond's yield adequately compensates for the risks it carries.