Thought folks might be interested to know that Schwab
has reduced their markups on bond purchases. Treasuries
now have no markup, even on the secondary market ("at
auction" purchases were already free). Other secondary
trades are now $1/bond ($10 min, $250 max). This is all
for on-line trades.
I guess the real reason I'm posting this is to ask other Schwab
folks here, who may be be smarter (more cynical) than me, if
this is as great as it looks ?
I'd love to get some more TIPS, what with the YTMs pretty good now.
Speaking of which, is YTM (and maturity date) the only number that
really matters ? Bloomberg currently shows the same YTM on a
2% 5-yr and 2.375% 10-year TIPS, the former trading at 97/100
and the latter at 98/100. Clearly the "current yield" on the 5-yr is
a lot lower, but the growth on the principal is a lot better (in other
words, your principal grows 100/97 in 5 years, instead of 100/98 in
10 years). So they seem to balance out to the same YTM, which
is all that matters, no ?
has reduced their markups on bond purchases. Treasuries
now have no markup, even on the secondary market ("at
auction" purchases were already free). Other secondary
trades are now $1/bond ($10 min, $250 max). This is all
for on-line trades.
I guess the real reason I'm posting this is to ask other Schwab
folks here, who may be be smarter (more cynical) than me, if
this is as great as it looks ?
I'd love to get some more TIPS, what with the YTMs pretty good now.
Speaking of which, is YTM (and maturity date) the only number that
really matters ? Bloomberg currently shows the same YTM on a
2% 5-yr and 2.375% 10-year TIPS, the former trading at 97/100
and the latter at 98/100. Clearly the "current yield" on the 5-yr is
a lot lower, but the growth on the principal is a lot better (in other
words, your principal grows 100/97 in 5 years, instead of 100/98 in
10 years). So they seem to balance out to the same YTM, which
is all that matters, no ?
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