| kim0201 -- I've been hoping someone with more insight would respond to your post. First, I must commend you for your disciplined investment strategy. The most important thing is to save regularly, and you've been doing that and investing safely -- you are very wise. I purchased some I-bonds in October 2001. I've been very pleased with the return, but the fixed rate was 3%. Rates had dropped dramatically from May 2001 to October 2001, so I had the advantage of knowing that the fixed rate would likely not see those levels again for quite some time. Because the fixed rate is only adjusted semi-annually, you can lock in the rate that was in effect six months prior -- an advantage if rates have fallen. The inflationary rate has been disappointing at times. They use core inflation, so food and energy aren't calculated into the equation. When I've gone in to check the new inflationary rate, I've been surprised that it wasn't higher. My inclination is to not invest in I-bonds now because the fixed part of the rate is low. I believe rates will go up (not immediately, but within the 5 year holding period) and while I believe that inflation will rise, too, the fixed rate portion can really hold back your return. Having said all of that, your strategy of dollar cost averaging is much more effective than trying to time the market like I'm doing. However, I don't invest regularly in Bonds -- just sometimes when the circumstances are appealing. I hope someone else here will provide you with more useful information. Keep up the good work! | 
