New 5.4% 6-Week T-Bill | How How Will Bond Yields Go | Weekly Treasury Auction Update May 2024
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- เผยแพร่เมื่อ 5 มิ.ย. 2024
- Callable US Treasuries & a new T-Bill, last week’s drop in bond yields, plus 👉 the upcoming week’s auctions & yield expectations for some of those auctions - that's what we're covering in our weekly Treasury auction update video!
📢 Learn all about bond investing & how to build a bond portfolio while rates are still high!
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How To Build A Bond Ladder: • How To Build A Bond La...
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*Sources can be found in first pinned comment
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******Learn all about bond investing & how to build a bond portfolio while rates are still attractive!
Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners
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Or get both & save $100: www.diamondnestegg.com/home#_paa2isucf
Join our super-supersaver membership for regular market updates & monthly live member Q&As th-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin
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WATCH NEXT
Our Bond Courses vs TH-cam Membership | Which Is Right For You: th-cam.com/video/H5h4Eyh0hjo/w-d-xo.html
Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: th-cam.com/video/uXPzbje1g2E/w-d-xo.html
Bond Masters Course Sneak Peak | How To Build A Bond Ladder: th-cam.com/video/p90IDmXn19s/w-d-xo.html
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Here is the overview for Bond Beginners:
1. Bond Basics
What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up
2. The Risks Of Bond Investing
Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up
3. US Treasuries Overview
What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up
4. Treasury Bills
What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up
5. Treasury Notes & Bonds
What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up
6. TIPS (Inflation-Protected)
What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up
7. I-Bonds (Inflation-Protected)
What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up
8. Agency Bonds
The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up
9. Municipal Bonds
Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up
10. Corporate Bonds
Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up
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Here is the overview for Bond Masters:
1. Stocks vs Bonds
Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up
2. Which Bonds Might Be Right For You
Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up
3. Bond Ladders & Other Bond Strategies
Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up
4. Holding to Maturity vs Selling Early
Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up
5. Individual Bonds, Bond Funds, Etc.
Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up
6. Our B.E.S.T. Model Portfolios By Age
Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up
7. The Decumulation Phase
What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up
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SOURCES FOR TODAY'S VIDEO:
home.treasury.gov/news/press-releases/jy2316
home.treasury.gov/news/press-releases/jy2315
treasurydirect.gov/auctions/upcoming/
www.fidelity.com/
home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics
www.bls.gov/news.release/empsit.nr0.htm
www.federalreserve.gov/mediacenter/files/FOMCpresconf20240501.pdf
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Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances & 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY.
Would love to hear your thoughts on Bitcoin.
Holding T-bills.
You're an exceptionally clear thinker, speaker and communicator of ideas!
I'm always reevaluating what to do with maturing t-bills, but typically end up rolling over into new 3-6 month t-bills. This stock market is driving me crazy and these 5.X% t-bills have (for me) proven to be the best place for relatively safe income generation right now.
Same here. My wife and I are retired - and have a large amount of fixed income.
Ditto. I'm on auto-roll. I've reinvested some of my gains in stocks that have recently corrected in value. Otherwise, it's 30-day T-Bills in 4 equal buckets rolling over week after week. I'm expecting a 10% correction in stocks come Sept/Oct.
Me too .... I love T-Bills .... I'm currently making around $600 to $650 a month in interest to supplement my SS.
@@HODIUSDUDE Yeah, I was looking at investing some t-bill gains into some companies I think offer a good value and are paying a respectable dividend. My problem is that whatever I'm watching continues to decline and I just don't feel comfortable yet. Recent dividend cuts by some "dividend king" companies has me shying away also. For now it's t-bill & chill :)
@@Riley_1955 Hey. that's great!
Your thorough explanations & graphics are allowing me to learn useful information, while displacing all the crap I learned in High School! Subscribed...🇺🇸 👍☕
Great job as always, Jennifer. The level to which you explain things is unmatched on YT. I appreciate the time you take to break these things down. I am sticking with my 8-52 week t-bills for the time being. Loving my 5.3+% on 8 weeks right now.
With the exception of a couple of TIPS purchased so far this year, I'm mainly sticking with T-Bills/CMBs with the highest yields.
As long as 6 month T bills stay above 5.25% I roll into a new 6 month T bill every Thursday. I did buy one two year recently when that rate hit 5%. I will keep a close eye on 2 year bond rates. Stocks just seem so grossly over valued especially large cap technology stocks Apple, Microsoft, google, meta, Amazon, Nvidia. So bonds feel good as the stock bubble blows up to a bursting point.
Holding T bills. This a country that lives on LT debt that it can't possibly repay.
You have the uncommon ability to explain complex ( govt debt instruments) in clear, concise language. Please keep it up I enjoy every video. For right now I am sticking with 4/8/13 week Tbills which I am laddering . Compare your channel with the "get rich quick " videos on YT and Tic Tok....wait there is NO comparison!!!
3 year Tips would be my choice. If they are looking for ideas, I would like to see 5,10, and 15 year, Treasury-issued Inflation adjusted strips.
Sticking with my 8 week T-Bill ladder for now. I'm thinking about mixing it up a bit using ladders with the 13, 17, and maybe the 6 week when it comes out, but I don't know if I want to complicate it. However, being paid multiple times a week might make it feel like I have more money 😀
I am 42 Years old. I have a rolling window of 6Month TBills every week for 6mo, a rolling window of 1yr 2yr 3yr notes expiring every month for the next 3 years. Every quarter I have a rolling window of 5, 10 year notes. Every 5 years I have 20 year bonds. Finally I have some Zero Coupon STRIPs going out 30 years bought at 76% discount making 6k become 25k by time I retire.
Now that’s a ladder😊
Wow! Very interesting. How does a 100k in treasuries look like for us who are interested.
Well done!
Unless you're using a Roth, won't you have a lot to pay in taxes on that income? You also need to consider how IRMAA could raise your Medicare premiums; it hasn't been indexed for inflation so far.
I continue to hold T-Bills as they supplement my already adequate SS income.
I'm with you there .... T-Bills are great and easy peasy to buy.
these videos are great thanks
Thank you Jennifer. Always very informative. I am sticking with T-bills and Munis for now. I do see some of my Munis are being called. They have a 5% coupon.
I’ve been buying the 42 day CMB’s in taxable account to pick up incremental 30bp yield over money market account while preserving liquidity. In retirement accounts have been using 3 and 6 month t-bills.
nice update well done, the compare spreadsheets very helpful. I'd B interested in the Callable Treasuries. More 4 WK T-Bills please...
Isn't the Bond buyback program just backdoor QE for the banks that hold a tremendous amount of low yield government notes??
This is the only benefit I can see, to bail out banks. Otherwise, there’s no excess cash to do a buyback so the treasury has to issue new debt to buyback the old debt.
I'll be staying with T-Bills. I'm also looking forward to the 6 week T-Bills through Treasury Direct. I have been buying 42 day CMB's through E*Trade, but auto-reinvesting and ladders were not possible there. As always, thanks for your most informative videos.
Hi Jennifer, I wanted to express my gratitude for the informative videos you shared about Bonds. I have a preference for I-Bonds because their prices remain stable and I can get my principal back. I'm not interested in investing in TIPS. I plan to stop purchasing CDs and invest in more TBILLS. You have really sparked my interest in Bonds. Thank you!
For treasuries, I will be participating only in the 4 and 6 month T Bill auctions. The jobs report increased the odds slightly that there will be one 25 basis point cut in the federal funds rate on or before the September meeting. The primary reason IMO is not the 3.9% unemployment rate, but the slowdown in hourly wage growth in April to just .2%, with the annual number declining to 3.9% from 4.1% in March and a 4.5% annual increase through December 2023. The next most important reason was a slowdown in new jobs in April (173K) from the revised February and March numbers of 236K and 315K respectively. My intermediate and long term bond exposure is primarily in high quality Tennessee Municipal bonds with an average credit rating of AA+.
Though the Fed will never say it, the jobs report looked like stagflation in the making.
Nice Video , I will be sticking with one month T bills for the next two months then maybe drift to 6 month or 52 week T bill.
Always excellent. Yes, the short T-Bills are too good to pass up right now imo. I do not understand why a 3-year TIP would be so good, but maybe I'll figure it out at some point.
My learned concern , CMB'S are not autoroll eligible on my fidelity. thanks my teacher.
Great news, thank you
The Treasury is continuing to move more and more debt to short term notes. Not a great way to structure the ballooning US debt.
The hope is that when those short term products mature, they can be refinanced at a lower rate after interest rates drop.
The more different t bill maturities the better. Love this news.
Another good video. The option I favor is 3 year tips. BTW, what are Green bonds? A buyback with current debt levels and that older bonds are at very low rates seems insane. The only bonds out there with higher rates than today are 2006 and earlier. Makes me think they can buy those back for a bit of saving and they think yields might go up toward 6% soon without it.
Hello Jennifer. I have been following your videos for past few weeks. I have learned a lot from these videos about treasury bills. I opened a Treasury Direct account and I funded it with my savings account at the bank. I purchased 4-Week Bills, 8-Week Bills, 13-Week Bills, 17-Week Bills, 26-Week Bills, and 52-Week Bill. Altogether I invested about $90,000 in those bill. I will be extremely happy to see what I will receive in interest when these T-Bills mature. Certainly much much higher what my bank was offering.
I am very happy and delighted I found your videos and followed your advice on treasury T-bill. Thank you.
@@_-Karl-_ You are very correct, but I don't have to worry about that. I am a senior citizen and with my annual income lowest tax bracket, I end up paying no taxes.
Great video! Question, on the Treasury Yields slide you showed the 1 month t-bill yield 5.51 but the Treasury pdf shows Investment Rate 4 week at 5.370 for May? Can you explain the difference?
I’m interested in this idea of a “green bond.”
Well I've never heard of green bonds before so those interest me the most
Jennifer
Do you like to invest in bonds over bond funds to reduce your interest risk ?
Short-term callable bonds would be interesting if they are anything like agency bonds.
couple of non callable cd's matured @ 7.5k each. Probably will go with 1 or 2 yr tbills.
Picked up a 3 year note purchase.
I've been DCA into the 30 year bond for the last 8 months, gonna stick with that strategy.
Good video as always. I was unaware that treasuries can be called.
US Agency Bonds are almost always callable. Sometimes they have very attractive rates and terms.
Sticking with 4-week ladder for now.
I have a individual investment account through Schwab that is not tax exempt. I’m looking to park some cash when I’m not trading. What do you recommend I look into.? Thanks.
Looks like I’m going to start a 6 week ladder
Do Tbills pay their rate over the course they are 'rated' for?
Three month T-bills. Looking for maturity at the start of earning season (just in case).
Perhaps time to start stretching into a little longer maturities?
Thank you Jennifer for these updates. They are SO helpful!! I as planning to go for the 3 Year Note tomorrow, but I opted for a noncallable 5% Coupon A rated Corporate this morning instead. I didn't have confidence that the 3 Year Note would be high enough for me to be happy with. I still think we could have intermittent spikes in Treasury yields over the next few months, so I'm biding my time. I'm waiting until early Wed. morning to decide on the 10 year, for which I would cannibalize my 17 week Bond ladder to purchase.
Same as you. Was planning to buy the 3 year note, but given the environment this last few days I’m going to hold off because yields dropped.
13 week t-bill. thanks
Unlikely to pick up any of this weeks 3 or 10 year note or 30 year bond. Will likely wait for the next 20 year Bond auction. Not going to get much for this week on the economic calendar. But next week is CPI & PPI. So yields could go up offsetting the recent NFP report sell off.
VT247
Can you talk about SGOV short term treasury ETF.
Thank you Jen for always having our backs! I find it incredible that only a slight worsening of employment numbers and a "will not hike" statement from Powell basically lowered yields across the board. Do you think it's best to wait for CPI numbers on May 15th (which I'm pretty sure will be high) and buy "long" after this date?
Hi Valentina - My general recommendation is to dollar cost average, rather than to buy everything all in one go at one auction because you simply don't know what the rate will be beforehand. I believe you are in Bond Masters, so I would refer you back to Module 3 in that course "Bond Ladders & Other Bond Strategies", video H "Laddering When Rates Are Uncertain". Hope this helps! Jennifer
@@DiamondNestEgg Thank you Jennifer. I’m a little anxious because I feel by the time I finish laddering 1 m, yields will have gone down considerably. Maybe buying on the secondary market is more suitable this time around. However, once on the secondary market, I get anxious about picking a ‘good’ price/ yield for an older person…meaning (bc mom.s 82) even if the price is higher, perhaps a higher coupon is more appropriate for her….so she can enjoy the higher coupon even if at maturity (say 10 or 20 yrs out, when odds are she won’t be around) she would have gotten a higher yield from a lower priced bond (with a lower coupon). So, anxiety is lurking everywhere! I just started learning about investing as my dad, a finance king, recently passed leaving us a little lost. I’m really very grateful for your couses and ongoing advice, the anxiety would have been tenfold without you!!
@@vallyb.3252 Hi Valentina! From Jennifer: "Is $1M the number you're working with for mom? I need more information." Eva
@@DiamondNestEgg Hi Eva and Jen, thanks for your reply. Yes, working with 1m which other than rental income and social security (adding up to $3000/mo) will be what she will be living off. Pressure on!! Thanks again!
@@DiamondNestEgg Yes, working w 1m. Other than a few rental properties (producing about $3000/mo), this is what she'll be living on. Thanks!
Floating Rate Notes. I would be interested in that but not the others.
Sticking with T bills 3&6 months
I’m still buying the 2 month notes. Remember the debt ceiling becomes an issue again on Jan 1 2025. Default discussions again in December?
How is the US going to buy back bonds if they are running deficits?
Greater fool theory? Offer more bonds at even greater rates... Death spiral.
@@arcstrikeful Yes, like using one credit card to pay off another!
How How Howdy Jennifer!!!
Those 6 wk T bills might be interesting but I just got my T bills into a ladder of 4 week bills, and my math skills may not be up to comparing ladders of 4 wk bills & 6 wk bills of the same overall total held for the same length of time, assuming the difference will stay roughly steady. For example, 4 wk bills have been at 5.275% and 42 d CMBs have been at 5.285%, both steady the last 3 weeks. At some overall amount, the difference might make a difference. I could calculate it manually, week by week for both ladders over one year, but there must be an easier way. Any suggestions?
If I did the calculations correctly, the difference would be somewhere around $10 per $100,000 per year of 4 week vs. 6 week T bills, reinvested as soon as they mature. I'll stick to my 4 wk ladder, and add to the rungs that are a little light whenever I can. As a hedge, I have some $$ in 5.52% and 6.15% agencies and 7% and 7.5% BBB corporates - all callable.
Those percentages your quoting are for the High Rate.The next column is the Investment rate. That’s what we get. 4 week is 5.370 and CMB is 5.392.Not a big difference but may make you feel a little better inside . Go to Treasury Direct. 20 most recent Auctions . Last column to the right.💲
Hi Anne - You don't need to calculate this yourself. That's why the investment rate is there (per Steven's answer). I think you are in both bond courses - if yes, I give a deep-dive into the investment rate & high rate in Module 4 (T-Bills) Video F (High Rate vs Investment Rate). You can also check out this TH-cam video - it's a bit older, but the content still holds: th-cam.com/video/keerkA4XaIk/w-d-xo.html
@@DiamondNestEgg Wow - Thanks- That module was essential - I started it once before but got bogged down in the weeds. Now I understand what the two rates are used for. (Yikes! I've been using the wrong rate in the Fidelity taxable equivalent calculator)
Do you need to have a Fidelity account to see those Treasury projections ?
The other brokerages should have similar offerings.
@@brucesmith9144 I buy on Treasury Direct, but that looks like a good tool.
6 month T-bills this week.
2 year T Bill is paying 5.163.
I thought fed, will not raise the rates.
I think if they do not do this, Japan would dump. The treasure is and America will be in big trouble so they had to raise the 2 year
where are you getting your yields from 5/3 (6:22 in the video). I'm looking @ the investment rate on TD for last weeks auctions. The numbers dont match what's in the video, nor do i see a 52wk bill auctioned last week
Green Bonds? What a Joke. ESG comes to the treasury bond market. Why not lock in agency bonds with 2-3yr call protection? Much higher rates than equivalent tbills.
I'd be interested in a GoldBond... oh wait, that product already exists
@@_-Karl-_ Real gold is totally inert
so i got 30 day T-Bills for $1000 last month thru TD, i assumed because it was around 5% it would be a $50 profit but it was $5, am i misunderstanding something?
You forgot that you're not invested for a full year, just one month, so you get 1/12th of the APR .You must divide the 5% by 12 to get the % of $1000 you will get as an interest payment.
@@pauldentler7127 oh okay, i get it now, that makes sense, i appreciate the feedback
T bills up to 2 years maturity
T Bills for now. 4 to 8 weeks.
I usually do 4 or 8 myself but over this last winter I tried a 13 week one which netted me $650 a month in interest.
One month t-bill every week.
Ditto.
3 year TIPS
Staying with 13wk
Thinking of 10 years notes
Wait until it returns to 5.00%
@@georgelien I actually think it will never happen
@@georgelien 10 YR US Agency Bonds are nearly 5% right now , FYI
wait is a treasury buyback program simply a way for the Treasury Dept to pretend to be the Federal Reserve?
If Govt can print more money why they need to borrow?
When they create more money out of thin air it will increase already high inflation
@@johnnyfive1412 🤣😂🤣😂
2022-2023, an online brokerage kept offering callable CDs. As an investor, one should have assumed that as soon as interest rates moved in your favor, the CDs would have been recalled. Callable treasuries would have to pay a premium to entice investors to be cheated of their interest.
GREEN BONDS!
I step away for a few days and the US Treasury goes a little nuts with callable debt, a new T-Bill, and green bonds? 😂
That callable debt better have some premium yield attached to it. Rates could come down and you lose your golden goose.
6 week Bills? Meh. I'm OK with 4 week bills, or whichever will give me juicier yields.
Green bonds will attract some attention but only some. It may allow people to invest with their values and their conscience. If yields are lower than typical debt then I'll probably pass.
Hope you enjoyed Omaha!
It takes more and more to keep that sailor drunk.
Green bonds.
First !
3 year TIPS