I live for this level of knowledge as a retail investor. This is the information the institutionals have known for decades and we are just now learning courtesy this incredible teacher DIamond NestEgg!!!
Thanks for visiting our personal finance channel! We hope this free content will help fast-track your financial journey! Everyone's financial journey is different. Please note that there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances. WATCH NEXT ⭐ Top Four Brokers For T-Bills: th-cam.com/video/eq68aL3RXxc/w-d-xo.html ⭐ My New $60,000 T-Bill Ladder: th-cam.com/video/4gaDsNYlxA8/w-d-xo.html ⭐ Brokered CDs vs T-Bills: th-cam.com/video/zhEiyW2N7KE/w-d-xo.html ⭐ T-Bill Rates, Pricing & Interest | High Rate vs Investment Rate: th-cam.com/video/keerkA4XaIk/w-d-xo.html ⭐ T-Bill Auction Schedule | When You Can Buy New Issue T-Bills: th-cam.com/video/xZr6EWkVJw0/w-d-xo.html ⭐ China & The Fed Are Dumping Treasuries - Should You: th-cam.com/video/Ywlr0JiTZMk/w-d-xo.html ⭐ T-Bill Must-Knows: th-cam.com/video/jIBn3VFkDw8/w-d-xo.html
Thanks, Jen. What a great new table for you. I swear I have clicked on the CUSIPs before and looked at those previous auctions (with different terms & prices) and had NO idea what I was looking at...so I just thought "this is not for me." And by "this," I meant T-bills, period. Today is the first time I understand reopenings, thanks to you!!
When you look at the available new issue T bills on Fidelity, look in the Attribute column. If "RI" is listed there, it means Reopened Issue, that's an easy way to know if it is.
I have bought in the secondary market a few times in the last couple months. First, it was just to experience the process of buying one of these on Fidelity's website. More recently, I bought secondary market to get my funds on the same due date. I was comparing secondary market price to the Fidelity core position, not prices on the same CUSIP. I have been scattershot buying over the last couple months while learning the bond market as a retail investor. Then, things were randomly coming due, making it difficult to keep track of what cash was available to rebuy. So, I bought secondary market for the date they come due. Plan was to follow and learn the market, then implement a ladder tbd when they all come due. That schedule will be easier to manage. Last reason to buy secondary v. auction was not losing $ waiting a week for the treasury to issue v. the reissue being available immediately.
Jennifer, thank you! Your content is always excellent and actionable. Your vids are like going to a short college lecture. After watching your channel my own due diligence I have purchased a 40k bond laddet! It s good. A little wary of our present political landscape defaulting on the bonds. I remember when NY city defaulted.
That depends on a number of things (e.g. if you buy in a taxable brokerage account vs a tax-advantaged retirement account). I’ll have some more details regarding the secondary market in this evening’s video.
You can better manage your maturities to your expenses in the secondary market. Waiting in cash for the next auction costs money. Not being able to match expenses to maturities also costs money.
Are there any other factors to consider when buying a reopened tbill at auction? Do I have to consider the price at which it sold in prior auctions when it comes to taxes, or does it behave like a new auctioned tbill?
How would you know at time of auction or before, whether your chosen Tbill would sell for less on secondary market after the auction? Isn’t it impossible to know, or am I missing something? I’ve just noticed the 3 mo Tbill I’ve ordered on Vanguard, is actually a reopening. So I want to know! If I could find out for sure what the auction price would be, and look at the secondary market price for this now-3-mo-Tbill, and still choose which one was best to buy … but there’s no way to see the actual auction price and then go and buy that if its better than the secondary price, right?
Please keep making these - you're featured in my high school class as "required" financial literacy. Many followers would be interested to know if you are currently taking on new clients? One question - how do you feel about metals for 2023 & 2024? Happy New Year and the very best wishes to you and yours !!
Thanks - nice to know! I hope you're students are enjoying our educational videos. As of now, we're not accepting new clients. And as for metals, I'll add this onto our video list. All the best for the coming year!
Hello, Jen, It's really an interesting comparison table that you shared with us. I think of a possible reason as to why the ask price in the secondary market could be lower than issue price at auction. The settlement (issue) date of the auctioned T-Bills are 2~4 days after the auction date. So, we should compare the ask price in the secondary market on the settlement (issue) date instead of a few hours right after the auction date. I guess the auction prices will be consistently lower than the secondary market prices if compared this way. The real YTM (Yield to Maturity) of the auctioned T-Bills is between the settlement (issue) date and the maturity date. BTW, I'm new to the auction (primary) market and I'm starting to join the T-Bill auction market thanks to your Charles Schwab tutorial video. I'm using an international Charles Schwab account, to which the "Auto Rollover" feature is not accessible, though. What a pity! Thanks for all of your videos!
last time i was able to buy more bills, then i had cash using the cost per bill instead of the maturity value. this time i was only able to buy as many as i had cash for. Is that because the action has not happened yet? This may be another factor to value the secondary market as you can get more of your cash into the yielding? I am not sure on this so any input is valued :)
I see T-Bills on Vanguard that mature in a few days with over 4% interest. Wouldn't it be better to buy that and get the return sooner rather than buying an auctioned T-Bill that takes a month to mature?
Hope to see video on how to sell t-bills/notes on secondary market when buy from broker. It seems retail investors may not get good bid price when selling small quantity prior to maturity.
Hey Jen, I’m a little confused about reopening pricing. Specifically looking at the 10yr T-Notes. The most recent reopening auctions went from ~$99 new issue to ~$104 for the reopenings. Can you explain the extra premium in price? I’m not understanding it :/ if I were to bid and get the $104 price on the upcoming reopening auction am I getting a bad deal or just not understanding the pricing? Thank you!! Just found your content and it’s gold!!!
Think I'm missing something with these tbills. I'm on Fidelity looking at the new issue tbills today...looks like the secondary mkt bills are yielding significantly higher. It's really not even close. Why in the world would I buy a new issue tbill if the secondary mkt offers better rates? Is this maybe not typical????
Thanks for providing this useful video as usual! Can I ask you for a reference to Options Trading and if you know of any Chanel that does a good job explaining this?
Hi Jen, I am wondering if there is a way to get capital gains from T-bills. I bought a six-month tbill with a very small interest rate on Schwab and sold it after 3 months at the end of December. I saw the transaction report and it showed almost all of the profit as a gain. I am hoping that the tax info that Schwab sends to the IRS also reports most of the profit as a gain but won't know for sure until the end of February when Schwab sends out their tax reports. In the meantime, I want to buy another treasury and have my eye on one that matures in February of 2024 with a coupon of 0125%. My plan would be to buy it soon and sell it before the end of 2023 in order to again achieve a profit mostly in capital gains. Can you advise on if it is possible to achieve capital gain tax treatment and how best to do it. I have heard that some bonds have accreted income and some do not. Is this true and if true which ones don't have accretion?
Sorry, we're not tax advisors, but as an FYI, the tax implications will depend on a number of factors (e.g., whether you're buying in a taxable brokerage account vs. tax-advantaged retirement account). I have a video coming out shortly that touches briefly on this.
Interesting, but for me, with so many choices between stocks, CDs, Treasuries of different lengths, not to mentions mutual funds, ETFs, options, gold, silver, etc, plus timing and taxes, I prefer reducing investing to key things. So, all I want to know is the yield and term of Treasuries acceptable to me.
I love watching your video. I learned a lot. Is it possible you can make a video to explain to us how to read Treasury 1099 INT and 1099B for Treasury Interest payment and capital gain/loss? Explain to us each box in 1099. I am sure people want to buy Treasuries also want to know how that is taxed. Thank you.
Love the channel. You gave me the info I needed to start at Treasury direct. I was wondering, if I buy a 4wk that was previously issued as a longer maturity, and I select the reinvest automatically option, will TD buy another 4wk or the longer maturity?
Will TD auto- reinvest your principal plus your interest earned at maturity? Do all the other 3 brokerage companies u talk about do the same on an auto reinvest (just principal or principal plus my interest)?
@@DiamondNestEgg ?? Thanks for all your good content. Am I misunderstanding User Guide 216 "If you purchase a 2-year note which was a re-opening of a 5-year note, due to the matching interest rates, payment dates, and maturity dates, your funds will be reinvested into a 5-year note.)"?
Will there be a time when the auction price drops a decent amount, or will there be some announcement prior alerting us that the auction price will be quite different For example, most are hovering around 4% yield, will there be a time when it just drops to 3%? Thanks
Thanks for sharing, Jen. Have you had any experience in buying short duration investment grade corporate bonds? If so, please explain how it's done. The abbreviations in the attribute columns are a bit confusing. I'm mostly looking for A or AA bonds to invest and hold to maturity at duration less than 1 year. Thanks in advance.
Jennifer, always a useful learning adventure and I'm an old dog that has been investing since the early 1980's. There was a 17 week new auction scheduled for early last week (Tuesday/Wednesday?) that I was planning to buy, then it disappeared. Do you know why? Does Treasury pull planned auctions? Keep up the great work and the best to you and your family this year.
Hi Ken. The 17-week is auctioned off weekly. This video explains when T-Bills show up as available for purchase with most brokers: th-cam.com/video/xZr6EWkVJw0/w-d-xo.html
I really like your videos! The content is informative and well-structured. As the Fed probably will STOP increasing the interest rate in April, do you recommend us purchasing the 8-week, 13-week or 26-week T-bills? Thank you!
@@DiamondNestEgg where the Fed has lowered the interest rate hike to 50 points, and more companies will stop hiring or lay off more people. The unemployment rate will definitely drop. it's likely the Fed will increase the interest rate at 50points, 25 points in the early 2023. I mean it's possible that Fed will start stoping the interest rate hike in April or May 2023
I suspect that the main market for those secondary market T-Bills would be folks or firms that a) missed the auction deadlines, or b) are moving much larger chunks of cash and can afford to chase the small premiums. The extra return on even a 10K T-Bill is pretty small, but might be worth the time/effort if putting 1 Million or more to work for that marginal return edge. I assume that the brokerages have the same rules in place for buying those secondary reissues T-Bills as they have for new auction T-Bills and there are no charges you might run into. What confuses me is how/why someone would be willing to offer those "new auction" T-Bills for less than they paid for them unless they have a need to flip that cash into an even higher-paying offering and are willing to take a small loss to set up a bigger win in the next few days. (Kind of like bailing on a low-interest CD to then roll those funds into High-Interest I-Bonds.)
I love your videos but iam a new investor. I am confused on what happened with my Vanguard account. I had 30,700 in my Vanguard account. I bought a t bill today set to expire on 4/18/23. I spent 10k into the tbill. Why does my account say I only have 20 ,700. Where is the 10k I spend on the tbill. It also shows 0% on what my tbill is yielding. Can someone tell me if I did something wrong.
If the T-bill’s issue date hasn’t arrived yet, it may show the debit from your core account (because you bought the T-bill and the order has been executed) but not yet reflect the 10K for the T-bill yet. Since you bought the T-bill, that 10K is no longer available for you to trade with for another investment, and also no longer available for you to withdraw from your core account. I think of buying T-bills as a pre-sale: you pay for it now (auction date) but don’t receive it until it “is released/comes out” (issue date).
Someone help me out. Ive been buying Treasuries on the Fidelity Secondary Market with maturities from a couple months out to two years. I find it very quick and easy. Someone please tell me what I am missing.
I don't think you're missing anything, I also find it more convenient to buy on the secondary market as you have an abundance of choices and don't have to wait and plan for an auction.
@@cchat3491 I have the same approach. When I have the cash I want to invest it and I want to pick the yield and the maturity. The secondary market lets me do this.
4 week at a 1000 and just have it auto invest mainly for my kids and don't want to invest anything into stock markets. I bought them ibonds as well at 1k each. I prefer the safe methods of investments personally.
I am a hold to maturity gal. I’m laddering it out. Not going too much past 9 months right now. My weighted average days is in the 5 month range. I’m expecting either increasing yields or at worst stable yields and keeping it short lest me ride the yields up.
Chasing after these secondary market issues seems like more work than it is worth for a small fry like me. Like many here, I have been buying at auction, and since I only have little bits of money available at a time, I go through TreasuryDirect. Set, forget, get, no regret, and not upset. It would have been interesting to see a delta-percent column. How much % price improvement and % of rate improvement would I get? Am I getting a 0.10% improvement on a 4.75% rate? I just made those numbers up, by the way. As always, thanks for posting and keeping the topic front and center in our finances! 😊
Hello - I am a little confused about whether “new issues” that are also “reopenings” okay to buy? It seems most of the new issue T-bills on Fidelity and TD are also “reopenings”. Thank you @DiamondNestEgg
What a rare gem this channel is! High quality content packed with ton of info and no nonsense.
I live for this level of knowledge as a retail investor. This is the information the institutionals have known for decades and we are just now learning courtesy this incredible teacher DIamond NestEgg!!!
Thank you. I wondered why anyone would buy a used bond when they can get a new one for the same price.
Thanks for visiting our personal finance channel! We hope this free content will help fast-track your financial journey! Everyone's financial journey is different. Please note that there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances.
WATCH NEXT
⭐ Top Four Brokers For T-Bills: th-cam.com/video/eq68aL3RXxc/w-d-xo.html
⭐ My New $60,000 T-Bill Ladder: th-cam.com/video/4gaDsNYlxA8/w-d-xo.html
⭐ Brokered CDs vs T-Bills: th-cam.com/video/zhEiyW2N7KE/w-d-xo.html
⭐ T-Bill Rates, Pricing & Interest | High Rate vs Investment Rate: th-cam.com/video/keerkA4XaIk/w-d-xo.html
⭐ T-Bill Auction Schedule | When You Can Buy New Issue T-Bills: th-cam.com/video/xZr6EWkVJw0/w-d-xo.html
⭐ China & The Fed Are Dumping Treasuries - Should You: th-cam.com/video/Ywlr0JiTZMk/w-d-xo.html
⭐ T-Bill Must-Knows: th-cam.com/video/jIBn3VFkDw8/w-d-xo.html
As a numbers geek myself I love that you have a favorite table.
Thanks, Jen. What a great new table for you. I swear I have clicked on the CUSIPs before and looked at those previous auctions (with different terms & prices) and had NO idea what I was looking at...so I just thought "this is not for me." And by "this," I meant T-bills, period. Today is the first time I understand reopenings, thanks to you!!
I think one benefit to buying t-bills at secondary market is knowing the exact price at the time of purchase, rather than waiting for auction results.
Correct - that’s important for some folks. Stay tuned for the Jan video on this & more.
I find it very interesting as the saying goes if you don't learn something new everyday you're wasted it I'm good for today
When you look at the available new issue T bills on Fidelity, look in the Attribute column. If "RI" is listed there, it means Reopened Issue, that's an easy way to know if it is.
Is there anything else to consider when it's an RI new issue tbill?
@@georgelopez9508 None that I know of, I've had no issues with any of the ones I purchased.
This is very much appreciated! This directly answered the question I had of whether to buy at auction or on the secondary market. Thanks!
I have bought in the secondary market a few times in the last couple months. First, it was just to experience the process of buying one of these on Fidelity's website. More recently, I bought secondary market to get my funds on the same due date. I was comparing secondary market price to the Fidelity core position, not prices on the same CUSIP. I have been scattershot buying over the last couple months while learning the bond market as a retail investor. Then, things were randomly coming due, making it difficult to keep track of what cash was available to rebuy. So, I bought secondary market for the date they come due. Plan was to follow and learn the market, then implement a ladder tbd when they all come due. That schedule will be easier to manage. Last reason to buy secondary v. auction was not losing $ waiting a week for the treasury to issue v. the reissue being available immediately.
Thanks for sharing
Jennifer, thank you! Your content is always excellent and actionable. Your vids are like going to a short college lecture. After watching your channel my own due diligence I have purchased a 40k bond laddet! It s good.
A little wary of our present political landscape defaulting on the bonds. I remember when NY city defaulted.
You said NYC defaulted on their bond. Did investors get bailed out on that by the govt so investors did not lose any money? How does that work?
Do you mean in the 70s?
Does it have any impact on state income taxes whether you buy a t-bill at auction or in the secondary market? Thank you!
That depends on a number of things (e.g. if you buy in a taxable brokerage account vs a tax-advantaged retirement account). I’ll have some more details regarding the secondary market in this evening’s video.
Great info - so it sounds like reopenings are preferred, like original auctions.
You can better manage your maturities to your expenses in the secondary market. Waiting in cash for the next auction costs money. Not being able to match expenses to maturities also costs money.
Are there any other factors to consider when buying a reopened tbill at auction? Do I have to consider the price at which it sold in prior auctions when it comes to taxes, or does it behave like a new auctioned tbill?
How would you know at time of auction or before, whether your chosen Tbill would sell for less on secondary market after the auction? Isn’t it impossible to know, or am I missing something? I’ve just noticed the 3 mo Tbill I’ve ordered on Vanguard, is actually a reopening. So I want to know! If I could find out for sure what the auction price would be, and look at the secondary market price for this now-3-mo-Tbill, and still choose which one was best to buy … but there’s no way to see the actual auction price and then go and buy that if its better than the secondary price, right?
Please keep making these - you're featured in my high school class as "required" financial literacy. Many followers would be interested to know if you are currently taking on new clients? One question - how do you feel about metals for 2023 & 2024? Happy New Year and the very best wishes to you and yours !!
Thanks - nice to know! I hope you're students are enjoying our educational videos. As of now, we're not accepting new clients. And as for metals, I'll add this onto our video list. All the best for the coming year!
Hello, Jen, It's really an interesting comparison table that you shared with us. I think of a possible reason as to why the ask price in the secondary market could be lower than issue price at auction. The settlement (issue) date of the auctioned T-Bills are 2~4 days after the auction date. So, we should compare the ask price in the secondary market on the settlement (issue) date instead of a few hours right after the auction date. I guess the auction prices will be consistently lower than the secondary market prices if compared this way. The real YTM (Yield to Maturity) of the auctioned T-Bills is between the settlement (issue) date and the maturity date.
BTW, I'm new to the auction (primary) market and I'm starting to join the T-Bill auction market thanks to your Charles Schwab tutorial video. I'm using an international Charles Schwab account, to which the "Auto Rollover" feature is not accessible, though. What a pity! Thanks for all of your videos!
Glad the videos are helpful & thanks for sharing!
Jennifer - thanks so much for all geometry, I'll stick with New Issue, Happy New Year!
Happy New Year!
The prices are higher for secondary but barely and you know the yield. Is that not worth it? What are people’s thoughts? Great video
Would you please make a video about T Notes 2, 3, 5 years. Buying at auction vs. secondary market? How to decide which maturity to purchase?
Noted
Jennifer Happy New Year ! I wish you good luck and prosperity in 2023.
Same to you Ed!
As usual, a very informative video. Thanks!
And, I agree that it's not worth the effort to try to catch a "deal" in the secondary market.
last time i was able to buy more bills, then i had cash using the cost per bill instead of the maturity value. this time i was only able to buy as many as i had cash for. Is that because the action has not happened yet? This may be another factor to value the secondary market as you can get more of your cash into the yielding? I am not sure on this so any input is valued :)
I see T-Bills on Vanguard that mature in a few days with over 4% interest. Wouldn't it be better to buy that and get the return sooner rather than buying an auctioned T-Bill that takes a month to mature?
I buy in the secondary market because it's too much of a hassle to set up an account with Treasury Direct.
Is it easy to sell before maturity on the secondary market and what are the negatives?
You have to have a broker, can’t use Treasury Direct.
Hope to see video on how to sell t-bills/notes on secondary market when buy from broker. It seems retail investors may not get good bid price when selling small quantity prior to maturity.
Stay tuned - I'll have more on this very soon.
Hey Jen, I’m a little confused about reopening pricing. Specifically looking at the 10yr T-Notes. The most recent reopening auctions went from ~$99 new issue to ~$104 for the reopenings. Can you explain the extra premium in price? I’m not understanding it :/ if I were to bid and get the $104 price on the upcoming reopening auction am I getting a bad deal or just not understanding the pricing? Thank you!! Just found your content and it’s gold!!!
Think I'm missing something with these tbills. I'm on Fidelity looking at the new issue tbills today...looks like the secondary mkt bills are yielding significantly higher. It's really not even close. Why in the world would I buy a new issue tbill if the secondary mkt offers better rates? Is this maybe not typical????
I don’t have much interest in the secondary market, but this is really helpful info.
Thanks for providing this useful video as usual! Can I ask you for a reference to Options Trading and if you know of any Chanel that does a good job explaining this?
Hi Jen, I am wondering if there is a way to get capital gains from T-bills. I bought a six-month tbill with a very small interest rate on Schwab and sold it after 3 months at the end of December. I saw the transaction report and it showed almost all of the profit as a gain. I am hoping that the tax info that Schwab sends to the IRS also reports most of the profit as a gain but won't know for sure until the end of February when Schwab sends out their tax reports. In the meantime, I want to buy another treasury and have my eye on one that matures in February of 2024 with a coupon of 0125%. My plan would be to buy it soon and sell it before the end of 2023 in order to again achieve a profit mostly in capital gains. Can you advise on if it is possible to achieve capital gain tax treatment and how best to do it. I have heard that some bonds have accreted income and some do not. Is this true and if true which ones don't have accretion?
Sorry, we're not tax advisors, but as an FYI, the tax implications will depend on a number of factors (e.g., whether you're buying in a taxable brokerage account vs. tax-advantaged retirement account). I have a video coming out shortly that touches briefly on this.
Interesting, but for me, with so many choices between stocks, CDs, Treasuries of different lengths, not to mentions mutual funds, ETFs, options, gold, silver, etc, plus timing and taxes, I prefer reducing investing to key things. So, all I want to know is the yield and term of Treasuries acceptable to me.
Thanks for your useful sharing!
I love watching your video. I learned a lot. Is it possible you can make a video to explain to us how to read Treasury 1099 INT and 1099B for Treasury Interest payment and capital gain/loss? Explain to us each box in 1099. I am sure people want to buy Treasuries also want to know how that is taxed. Thank you.
Love the channel. You gave me the info I needed to start at Treasury direct. I was wondering, if I buy a 4wk that was previously issued as a longer maturity, and I select the reinvest automatically option, will TD buy another 4wk or the longer maturity?
If you buy a 4-week new issue (even if it’s part of reopening auction) & you opt to auto-reinvest, TD will buy another 4-week T-Bill at maturity.
Will TD auto- reinvest your principal plus your interest earned at maturity? Do all the other 3 brokerage companies u talk about do the same on an auto reinvest (just principal or principal plus my interest)?
@@DiamondNestEgg ?? Thanks for all your good content. Am I misunderstanding User Guide 216 "If you purchase a 2-year note which was a re-opening of a 5-year note, due to the matching interest rates, payment dates, and maturity dates, your funds will be reinvested into a 5-year note.)"?
👏 great video, thank you for this one 🙏😊
Congrats on 50K Subs!!!
About to release my iBond gifts...
Could the secondary auctions be symptomatic of lesser demand?
Thanks! It could be a number of reasons (e.g., supply & demand, expectations of Fed pivot, etc)
Will there be a time when the auction price drops a decent amount, or will there be some announcement prior alerting us that the auction price will be quite different
For example, most are hovering around 4% yield, will there be a time when it just drops to 3%?
Thanks
This T-Bill basics video should provide more clarity on how auctions work: th-cam.com/video/jIBn3VFkDw8/w-d-xo.html
Thanks for sharing, Jen. Have you had any experience in buying short duration investment grade corporate bonds? If so, please explain how it's done. The abbreviations in the attribute columns are a bit confusing. I'm mostly looking for A or AA bonds to invest and hold to maturity at duration less than 1 year. Thanks in advance.
I’ll be doing videos on other types of bonds this year
@@DiamondNestEgg Thanks. Will be looking forward to it.
Jennifer, always a useful learning adventure and I'm an old dog that has been investing since the early 1980's.
There was a 17 week new auction scheduled for early last week (Tuesday/Wednesday?) that I was planning to buy, then it disappeared. Do you know why? Does Treasury pull planned auctions?
Keep up the great work and the best to you and your family this year.
Hi Ken. The 17-week is auctioned off weekly. This video explains when T-Bills show up as available for purchase with most brokers: th-cam.com/video/xZr6EWkVJw0/w-d-xo.html
17 weeks tbills are quick. Announce it Tues actioned the next day.
Is there anywhere we can download your spreadsheet?
I really like your videos! The content is informative and well-structured. As the Fed probably will STOP increasing the interest rate in April, do you recommend us purchasing the 8-week, 13-week or 26-week T-bills? Thank you!
Why do you think the Fed will stop raising rates in April?
@@DiamondNestEgg where the Fed has lowered the interest rate hike to 50 points, and more companies will stop hiring or lay off more people. The unemployment rate will definitely drop. it's likely the Fed will increase the interest rate at 50points, 25 points in the early 2023. I mean it's possible that Fed will start stoping the interest rate hike in April or May 2023
I suspect that the main market for those secondary market T-Bills would be folks or firms that a) missed the auction deadlines, or b) are moving much larger chunks of cash and can afford to chase the small premiums. The extra return on even a 10K T-Bill is pretty small, but might be worth the time/effort if putting 1 Million or more to work for that marginal return edge.
I assume that the brokerages have the same rules in place for buying those secondary reissues T-Bills as they have for new auction T-Bills and there are no charges you might run into. What confuses me is how/why someone would be willing to offer those "new auction" T-Bills for less than they paid for them unless they have a need to flip that cash into an even higher-paying offering and are willing to take a small loss to set up a bigger win in the next few days. (Kind of like bailing on a low-interest CD to then roll those funds into High-Interest I-Bonds.)
Stay tuned for my Jan video. All the best for 2023 Pete.
So does this mean you are buying TBills off of Treasury Direct?
I buy them primarily through brokers - it’s just my personal preference
I do not have SS number (non-USA citizen) - so I cannot take part in T-Bills auction. Only secondary market is available for me.
I love your videos but iam a new investor. I am confused on what happened with my Vanguard account. I had 30,700 in my Vanguard account. I bought a t bill today set to expire on 4/18/23. I spent 10k into the tbill. Why does my account say I only have 20 ,700. Where is the 10k I spend on the tbill. It also shows 0% on what my tbill is yielding. Can someone tell me if I did something wrong.
If the T-bill’s issue date hasn’t arrived yet, it may show the debit from your core account (because you bought the T-bill and the order has been executed) but not yet reflect the 10K for the T-bill yet. Since you bought the T-bill, that 10K is no longer available for you to trade with for another investment, and also no longer available for you to withdraw from your core account. I think of buying T-bills as a pre-sale: you pay for it now (auction date) but don’t receive it until it “is released/comes out” (issue date).
Because T-Bills only pay interest at maturity, some brokerages will list them as zero-coupon. That may be why you see the 0% yield.
Are short term t-ill ETF's worth considering? SGOV BIL for example.
I’ll probably do some ETF videos in the new year
@@DiamondNestEgg Cool. Thanks for responding. Your ideos are great.
Someone help me out. Ive been buying Treasuries on the Fidelity Secondary Market with maturities from a couple months out to two years. I find it very quick and easy. Someone please tell me what I am missing.
You might be missing out on the best rates
I don't think you're missing anything, I also find it more convenient to buy on the secondary market as you have an abundance of choices and don't have to wait and plan for an auction.
@@cchat3491 I have the same approach. When I have the cash I want to invest it and I want to pick the yield and the maturity. The secondary market lets me do this.
Agree, secondary market provides flexibility in choosing the maturity date and the corresponding yield.
Are earnings from T-Bills from Secondary Market subject to State and Local taxes?
8,13,17 week, what you guys buying ?!?!?!?
4 week at a 1000 and just have it auto invest mainly for my kids and don't want to invest anything into stock markets. I bought them ibonds as well at 1k each. I prefer the safe methods of investments personally.
I am a hold to maturity gal. I’m laddering it out. Not going too much past 9 months right now. My weighted average days is in the 5 month range. I’m expecting either increasing yields or at worst stable yields and keeping it short lest me ride the yields up.
Thx
17,26,52 weeks mostly. I started with 4,8,13,17 weeks and now expands the duration as Fed is almost done with the rate increasing.
Thanks for sharing your strategies everyone!
Secondary market has higher brokerage commish than new issue auction at Schwab.
There are no fees for Treasury new issues and secondary market trades online with Schwab. If you call in, then there is a fee for both.
Chasing after these secondary market issues seems like more work than it is worth for a small fry like me. Like many here, I have been buying at auction, and since I only have little bits of money available at a time, I go through TreasuryDirect. Set, forget, get, no regret, and not upset.
It would have been interesting to see a delta-percent column. How much % price improvement and % of rate improvement would I get? Am I getting a 0.10% improvement on a 4.75% rate? I just made those numbers up, by the way.
As always, thanks for posting and keeping the topic front and center in our finances! 😊
Glad you enjoyed the video - as always!
Hello - I am a little confused about whether “new issues” that are also “reopenings” okay to buy? It seems most of the new issue T-bills on Fidelity and TD are also “reopenings”. Thank you @DiamondNestEgg
I explain reopenings in this video