Why is this Topic Important to Wealth Managers? Today we continue our series on “Wealth Management in Today’s Economic Environment”. The series is designed to address the specific question many wealth managers are currently asking: “what are the best investment, retirement and financial planning tools given the current global financial position?” We explore alternatives from “safe” to “risky” from “traditional” to “emerging” to discover and discuss the most relevant wealth management tools and techniques available today. We look forward to presenting this discussion and think you will find the information quite valuable. Please note that this series is presented in continuation. That being said each blogticle resumes discussion from the previous day.
Warren Buffett’s mentor, “legendary investor” Benjamin Graham, once “wrote that when challenged ‘to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.’ Those are wise words for all seasons, but especially at a time like this.” 
Are government backed investments one way in which clients can find some safety?
Generally United States “securities are debt instruments issued by the U.S. Treasury to raise money needed to operate the federal government and to pay off maturing obligations.”  The “paper” is backed by the “full faith and credit of the United States government guarantees that interest and principal payments will be paid on time, and thus, these securities are considered very safe investments.”  But has the financial position in Washington changed the traditional view of these obligations?
Treasury bills, or T-bills, “are short-term government securities with maturities ranging from a few days to 52 weeks.”  The Bills are generally sold at a discount from the par value or face amount of the bill. An example, an investor may pay $990 for a $1,000 bill. When the bill matures, the investor is paid the full $1,000. The discount or difference between the purchase price and the redemption price is interest.
Treasury notes, or T-notes, are “issued in terms of 2, 3, 5, 7, and 10 years, and pay interest every six months until they mature.”  Further, the notes may be sold at a discount (for less than face value), at a premium (for more than face value) or for face value. When the note matures, the investor is paid full face value, in addition to the interest payments received.
A few of the key features of T-notes include:
- The yield on a note is determined at auction.
- Notes are sold in increments of $100. The minimum purchase is $100.
- Notes are issued in electronic form.
- An Investor can hold a note until it matures or sell it before it matures. 
Treasury bonds are issued for terms of 30 years and pay interest every six months until maturity. When a Treasury bond matures, the investor is paid its face value.
“The price and yield of a Treasury bond are determined at auction.”  Like a T-note, a T-bond, may be issued at a discount, premium or face value. T-bonds “exist in either of two formats: as paper certificates (these are older bonds) or as electronic entries in accounts.” Today, Treasury bonds are issued exclusively in electronic form.
Total current outstanding debt issued by the Treasury in bills, notes, bonds and other evidence of indebtedness is approximately 13.8 Trillion dollars, as of the end of November 2010. 
Tomorrow we continue our series with additional U.S. government investments.
We invite your questions and comments by posting them below, or by calling the Panel of Experts.
Series Author: Benjamin Terner
Chris Farrell. Safe Investing in a Troubled Economy. Bloomberg Businessweek. September 25, 2008.
 AdvisorFX. AUS Main Libraries , Section 22.2 Investment Vehicles, B—U.S. Treasury and Government Agency Securities. http://www.advisorfx.com/articles/f22-2_1_13_3760.aspx?action=13. Last Accessed 11/29/2010.
 AdvisorFX. U.S. Treasury and Government Agency Securities.
 Untied States Department of the Treasury. Treasury Direct-Treasury Bills. http://www.treasurydirect.gov/indiv/products/prod_tbills_glance.htm. Last Accessed 11/29/2010.
 Untied States Department of the Treasury. Treasury Direct-Treasury Notes. http://www.treasurydirect.gov/indiv/research/indepth/tnotes/res_tnote.htm. Last Accessed 11/29/2010.
 Untied States Department of the Treasury. Treasury Direct-Treasury Notes.
 Untied States Department of the Treasury. Treasury Direct-Treasury Bonds. http://www.treasurydirect.gov/indiv/products/prod_tbonds_glance.htm. Last Accessed 11/29/2010.
 Damian Paletta. The Wall Street Journal. Debt-Panel Chairmen Work to Gain Support. November 29, 2010. http://online.wsj.com/article/SB10001424052748703785704575643111128016590.html. Last accessed 11/29/2010.; see also Untied States Department of the Treasury. Treasury Direct. http://www.treasurydirect.gov/NP/BPDLogin?application=np. Last Accessed 11/29/2010.