Treasury Bills, Notes, and Bonds Discussion

[G-Man]

No, those are the 13-week and 26-week to be auctioned next Monday (tomorrow).

You don’t find out the exact yield until after the auction, but it usually doesn’t change that much from the prior week.

Ok. Got it. Do you purchase between the announcement and auction date?

 

[RetiredAndLovingIt]

So these 2 are available to buy now for Tuesdays auction?

 

[audreyh1]

Are these still available to purchase? These are the 2 on the Fidelity site.

Yes, you can order now up to early morning tomorrow.

Ok. Got it. Do you purchase between the announcement and auction date?

Yes, once the t-bill is announced by treasury (11am eastern), it usually shows up under new issues a couple of hours later at Fidelity.

You place an order and then it gets filled at the auction.

 

[audreyh1]

So these 2 are available to buy now for Tuesdays auction?

The auction is tomorrow- Monday.

Yes, you can place your order through Fidelity right now.

 

[RetiredAndLovingIt]

The auction is tomorrow- Monday.

Yes, you can place your order through Fidelity right now.

Great info, thanks. I always thought Trade was for secondary market issues.
I bought the 26 week one.

 

[audreyh1]

I also have a 26 week T-bill order in for tomorrow’s auction. Hope we see 4.85%+, or at least close.

 

[G-Man]

I also have a 26 week T-bill order in for tomorrow’s auction. Hope we see 4.85%+, or at least close.

Have you created a T-bill ladder?

 

[audreyh1]

Have you created a T-bill ladder?

Yes, I’ve got a 26-week T-bill ladder maturing every 2 months. These are funds I’m not likely to need for over a year.

 

[G-Man]

Yes, I’ve got a 26-week T-bill ladder maturing every 2 months. These are funds I’m not likely to need for over a year.

To build a 26-week ladder, do you start with the purchase of a 4,8,13,17, and 26 T-Bills at the same time?

 

[audreyh1]

No, I never bought anything shorter than a 13-week bill. In this particular case I had some new funds coming into an account that already had some 6 month t-bills that I’d bought at different times, so I’m simply adding another that spaces everything out nicely.

 

[Spock]

To build a 26-week ladder, do you start with the purchase of a 4,8,13,17, and 26 T-Bills at the same time?

You can start however you like. The number of rungs per year depends on how frequently you want cash to come available (a bond to mature). Once every month? once every quarter?

Another factor is how often you want to go through the process of finding and buying.
One method is as you describe... buy 4's,8's, etc all in one sitting and then next month when the 4's mature you buy the longest rung in your ladder.
4 weeks later when the 8's are maturing you do the same.
Other's buy their longest rung now, wait a month and buy another longest rung, etc.
The difference is in how much your cash earns while waiting to buy a rung.

 

[JoeWras]

I started with 13s last spring. Started adding 26s every other time after a 13 matured. In fall, when a 13 matured, it went to a 26 or 52. I've now scrubbed off my 13s, and it is all 26 or 52. I have something maturing every other week from now until September. In September it will be the same, but it will be all 52s or 26s.

This is all for better or worse. My lowest bill is about 3.2% maturing in about 10 days. Looks bad, but at the front end it was a great rate.

 

[G-Man]

You can start however you like. The number of rungs per year depends on how frequently you want cash to come available (a bond to mature). Once every month? once every quarter?

Another factor is how often you want to go through the process of finding and buying.
One method is as you describe... buy 4's,8's, etc all in one sitting and then next month when the 4's mature you buy the longest rung in your ladder.
4 weeks later when the 8's are maturing you do the same.
Other's buy their longest rung now, wait a month and buy another longest rung, etc.
The difference is in how much your cash earns while waiting to buy a rung.

Is there a preference on the number of rungs? I thought you can set it on auto-pilot with the re-invest option.

 

[audreyh1]

Is there a preference on the number of rungs? I thought you can set it on auto-pilot with the re-invest option.

You can leave it on autopilot once you have reached your max maturity.

Number of rungs simply depends on how often you want things to mature.

 

[Spock]

Is there a preference on the number of rungs? ....

Purely a personal decision. 3-4 years ago I had setup bigger sized rungs every 6 months outside the IRAs. I had built a 5 year ladder * 2 rungs per year = 10 rungs. I didn't want to deal with 60 "tiny" rungs by having monthly rungs. I was considering buying a car and have a relatively long sell cycle so having a window every 6 months was fine.



In my IRA's I'm doing only 1(ish) rung per year and laddering out about 10 years as I only do withdrawals once a year so long as the rung is in Nov/early-December. The number of years out in the IRAs are (trying to) factor in milestones such when I start Medicare, when I start SS, etc.

 

[pb4uski]

Yeah, I'm trying to have 20 reasonably even sized quarterly rungs in my bond ladder... maturing anytime in the quarter is fine.

 

[audreyh1]

Today’s auction results. 13-week finally broke 4.7%. 26-week just a smidge under last week’s rate.

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
13-Week	No	912796YW3	02/02/2023	4.595%	4.714%	$98.838486
26-Week	No	912796Y37	02/02/2023	4.680%	4.860%	$97.634000

 

[JoeWras]

Today’s auction results. 13-week finally broke 4.7%. 26-week just a smidge under last week’s rate.

Bills CMB CUSIP Issue Date High Rate Investment Rate Price per $100

13-Week No 912796YW3 02/02/2023 4.595% 4.714% $98.838486

26-Week No 912796Y37 02/02/2023 4.680% 4.860% $97.634000

Your prediction was pretty good.

 

[audreyh1]

Your prediction was pretty good.

I just notice where the previous issue trades on my CNBC app watchlist which includes after hours, or on the Treasury daily history list.

 

[MarieIG]

Your prediction was pretty good.

Thanks. Picked up a 13 week in our house account.

 

[copyright1997reloaded]

Today’s auction results. 13-week finally broke 4.7%. 26-week just a smidge under last week’s rate.

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
13-Week	No	912796YW3	02/02/2023	4.595%	4.714%	$98.838486
26-Week	No	912796Y37	02/02/2023	4.680%	4.860%	$97.634000

I wonder if we will see 3 month paper yielding more than 12 month soon. Talk about an inverted yield curve!

In the meantime, I grabbed some of both of these...but running out of new money from my 401k->Rollover to invest. I'm keeping a chunk to slowly/eventually allocate into equities, and need to be careful not to use all of that up on "longer duration" (ha ha) T-Bills.

 

[audreyh1]

This week’s t-bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912796Y86	02/07/2023	4.490%	4.568%	$99.650778
8-Week	No	912796Z93	02/07/2023	4.505%	4.600%	$99.299222
13-Week	No	912796YW3	02/02/2023	4.595%	4.714%	$98.838486
17-Week	No	912797FM4	02/07/2023	4.625%	4.762%	$98.471181
26-Week	No	912796Y37	02/02/2023	4.680%	4.860%	$97.634000

Last week’s results: https://www.early-retirement.org/fo...d-bonds-discussion-115186-65.html#post2887867

 

[mrfeh]

This week’s t-bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912796Y86	02/07/2023	4.490%	4.568%	$99.650778
8-Week	No	912796Z93	02/07/2023	4.505%	4.600%	$99.299222
13-Week	No	912796YW3	02/02/2023	4.595%	4.714%	$98.838486
17-Week	No	912797FM4	02/07/2023	4.625%	4.762%	$98.471181
26-Week	No	912796Y37	02/02/2023	4.680%	4.860%	$97.634000

Last week’s results: https://www.early-retirement.org/fo...d-bonds-discussion-115186-65.html#post2887867

Next week will be interesting. Rates dropped quite a bit the last 2 days.

 

[audreyh1]

Yes.

But today’s 4-week and 8-week auction they didn’t budge in spite of the 1/4 point rate rise yesterday. I thought that was interesting. I thought they would be higher.

 

[workmyfingerstothebone]

Tbills vs munis

Good day to all.


I have a question on muni bonds.


Using this site for the data: https://personal.vanguard.com/us/FixedIncomeHome
there are a number of listed choices for investment.



Currently the 1 year Tbill is offered at 4.72%.


Moving down the list of available choices I see "Municipals highest grade" 1 year offered at 2.35%.


I don't get it.

Why buy any of the muni bonds, their quality rating can't be any higher than a Tbill.


Thanks for any input on this....