Treasury Bills, Notes, and Bonds Discussion

[grasshopper]

I have a bill maturing manana but I will repurpose part of it for a Discover Bank $150 for 2 month bonus offer.

 

[disneysteve]

I bought a 26-week T-Bill at auction today at 3.576%.

I bought a 6-month on the secondary market today for 3.519%, so a bit lower but not a huge difference.

 

[Golden sunsets]

I established an 11 month Treasury ladder today at Fido. Issues mature monthly starting 12/13/22 through 10/31/23. Average yield is 3.45%.

We live in an income tax state, so there's a savings there.

 

[Dash man]

2-year Treasuries touched 3.7% this morning.

 

[workmyfingerstothebone]

So... I posted earlier that I picked up some 1 yr Tbills @ 3.1%.


Turns out I got a 10 months bill @ 2.6% ( I'm still trying to figure out how to calculate all this).
That is I got a 1yr note with 10 months left on it.

I thought I was buying a 1yr from 8/9/22 to 8/9/23 but I got a 10 month from 6/8/22 to 6/8/23 ? I guess I was buying on the secondary market.

Turns out I'm not that smart after all . Don't understand all the math behind this but I'll get there.



Today it looks like the feds announce the following new issue Tbill auction, I will try to get some of these on Vanguard today.


Bills CMB CUSIP Offering Amount Announcement Date Auction Date Issue Date

4-Week No 912796YE3 09/13/2022 09/15/2022 09/20/2022
8-Week No 912796YQ6 09/13/2022 09/15/2022 09/20/2022

 

[workmyfingerstothebone]

I bought a 26-week T-Bill at auction today at 3.576%. The 13-week sold at 3.142%.

26 weeks is as far out as I’d go at this point and is close to what the 52 week sold for last week at 3.603%.

When you say you bought @ 3.142% at auction does that mean you selected a TBill paying 3.142% @ 26 weeks?



I am under the impression that one just puts in an order and you get whatever the auction price turns out to be.


I'm new to this so excuse my ignorance.

 

[CRLLS]

I have been skipping over threads like this because I though them to be too complicated. Reading this thread has me changing my mind. I admit I was wrong. Thank you all for making me rethink. I am finally going to take the plunge into treasuries. A combination of I-bonds and t-bills are my plan. I'm not looking for income, just tired of not earning any appreciable interest on my safety net.

My tentative plan is to close an online savings account and move those $ to my local savings bank. From there I will transfer most of those $ to Fido. I do this because I currently have Fido and my local bank already linked, From the Fido account I will purchase some t-bills, maybe a 4 tier ladder.

Some of the remaining $ not transferred to Fido will be used to purchase I-bonds for both myself and DW. I will likely hold back some cash for another I-bond purchase come January of next year.

Thanks again for this valuable discussion.

 

[11522914]

Wow, 1 year Treasury Bill at 3.86% this morning. Tempting but still not buying until after next Fed meeting. Staying really short term.

 

[tulak]

When you say you bought @ 3.142% at auction does that mean you selected a TBill paying 3.142% @ 26 weeks?



I am under the impression that one just puts in an order and you get whatever the auction price turns out to be.


I'm new to this so excuse my ignorance.

You get the rate that is set at auction. The rates that I listed is what were set at auction. I had no control over what I got.

All I do is put an order to buy x amount of 13 or 26 week t-bills and hope for the best.

In this thread, or another one, Audrey and others mention how they try to estimate what the rate will be at auction.

 

[jldavid47]

The US Treasury web site has the historical yield curve available updated daily. The table does not include the current day. I use the bond trading function on the Schwab web site to see the most up-to-the-minute numbers.

https://home.treasury.gov/resource-...yield_curve&field_tdr_date_value_month=202209

 

[audreyh1]

2-year Treasuries touched 3.7% this morning.

1-year treasury still higher at 3.89% and the 6 month at 3.76%.

Inflation report came in a little hotter than expected.

 

[audreyh1]

So... I posted earlier that I picked up some 1 yr Tbills @ 3.1%.


Turns out I got a 10 months bill @ 2.6% ( I'm still trying to figure out how to calculate all this).
That is I got a 1yr note with 10 months left on it.

I thought I was buying a 1yr from 8/9/22 to 8/9/23 but I got a 10 month from 6/8/22 to 6/8/23 ? I guess I was buying on the secondary market.

Turns out I'm not that smart after all . Don't understand all the math behind this but I'll get there.



Today it looks like the feds announce the following new issue Tbill auction, I will try to get some of these on Vanguard today.


Bills CMB CUSIP Offering Amount Announcement Date Auction Date Issue Date

4-Week No 912796YE3 09/13/2022 09/15/2022 09/20/2022
8-Week No 912796YQ6 09/13/2022 09/15/2022 09/20/2022

4 week and 8 week are announced on Tuesday and auctioned on Thursday barring a holiday. 13 week and 26 week and sometimes the 52 week are announced on Thursday and auctioned the following Monday. The 52 week t-bill is offered every 4 weeks.
https://www.treasurydirect.gov/instit/instit.htm?upcoming

 

[copyright1997reloaded]

Interestingly enough, the 4-week t-bill rate has dipped a bit today (2.496) while the 3-month is higher (3.25%).

I might funnel some more $ to Schwab for next weeks 13 & 26 week auctions. My first purchases (8-week) will be maturing early October, we will see what rates are then.

 

[jldavid47]

Interestingly enough, the 4-week t-bill rate has dipped a bit today (2.496) while the 3-month is higher (3.25%).

I might funnel some more $ to Schwab for next weeks 13 & 26 week auctions. My first purchases (8-week) will be maturing early October, we will see what rates are then.

I'm looking at putting a bit into the 26 week and 2 year note auctions on 9/26 and the 52 week auction on 10/4.

I have a bunch of bills maturing between next week and a year from now. I have not been too worried about getting stuck at a low rate since I only put a tiny portion of my allocation toward each individual bill.

 

[foxfirev5]

1-year treasury still higher at 3.89% and the 6 month at 3.76%.

Inflation report came in a little hotter than expected.

Yeah I'm struggling with this one. DM has a 1 year T Bill ladder and now has funds to add. Do we go 2 years with this additional 20% or add to each of the 4 rungs on the one year ladder?

 

[Graybeard]

So... I posted earlier that I picked up some 1 yr Tbills @ 3.1%.


Turns out I got a 10 months bill @ 2.6% ( I'm still trying to figure out how to calculate all this).
That is I got a 1yr note with 10 months left on it.

I thought I was buying a 1yr from 8/9/22 to 8/9/23 but I got a 10 month from 6/8/22 to 6/8/23 ? I guess I was buying on the secondary market.

Turns out I'm not that smart after all . Don't understand all the math behind this but I'll get there.



Today it looks like the feds announce the following new issue Tbill auction, I will try to get some of these on Vanguard today.


Bills CMB CUSIP Offering Amount Announcement Date Auction Date Issue Date

4-Week No 912796YE3 09/13/2022 09/15/2022 09/20/2022
8-Week No 912796YQ6 09/13/2022 09/15/2022 09/20/2022

If you are using Vanguard's site to look at or buy treasuries, the default setting is secondary so if you continue they are showing you the treasuries only on the secondary market. If you want to see what is available for auction, then you need to click on the radio button for auction. I have no idea how other brokerage sites look but your confusion about you thought you were buying at auction sounds like being new to this you are on Vanguard and did not realize you need to change from secondary to auction.

As far has having bought the wrong bills, maybe you clicked on the wrong line and selected a bill you didn't men to select? You don't need to figure out the math, when you look at the secondary market offerings they tell you the YTM and YTW (which are the same for treasuries) so that is the yield you will get and remember that is an annualized yield not for the 10 months. If you buy at auction, Vanguard shows an indictive yield but that is just a guess, you will not know until the auction is over. In your confirmation statement you'll see the yield. I'm new to this also but from what others have said here and what I now understand looking at the secondary bills for a duration of say 4, 8, 13 etc weeks, that is pretty close to what to expect but again that can and probably will change as the auction will be a few days away and who knows how yields can change in that time.

 

[Graybeard]

I was not surprised when the inflation rates were announced at 8:30, I did not think they would drop rather that they would go up. I also thought the market was nuts yesterday and would drop a lot today, which at 1 pm (the last time I looked) it was giving back most of the gains over the past few weeks. I was surprised at how much the 2 year note was just after 8:30.

I bought 20 more T bills on the secondary market that mature 10/11 at 2.433%. I am still hesitant to make any large purchases for 13 or 26 weeks just yet as I think there will be better opportunities in the coming few weeks.

 

[11522914]

I was not surprised when the inflation rates were announced at 8:30, I did not think they would drop rather that they would go up. I also thought the market was nuts yesterday and would drop a lot today, which at 1 pm (the last time I looked) it was giving back most of the gains over the past few weeks. I was surprised at how much the 2 year note was just after 8:30.

I bought 20 more T bills on the secondary market that mature 10/11 at 2.433%. I am still hesitant to make any large purchases for 13 or 26 weeks just yet as I think there will be better opportunities in the coming few weeks.

I'm keeping everything short term right now too. Most of my T bills expire 09/27 - 10/11. I will be locking in some 13 week to 26 weeks after the next Fed meeting.

 

[jldavid47]

I bought 20 more T bills on the secondary market that mature 10/11 at 2.433%. I am still hesitant to make any large purchases for 13 or 26 weeks just yet as I think there will be better opportunities in the coming few weeks.

You do realize that you are admitting to trying to time the bond market, right? Not that there's anything wrong with that.

I'm not making any large purchases in the treasury market either, but many smaller ones with maturities from a few weeks to just over a year. Right now I have T-bills maturing every 7-14 days between now and the end of March and every 28 days from April through September, 2023. Yes, I might get "stuck" with a relatively low rate but since I am allocating over a large range of short-term maturities I don't worry about it. I started doing this back in March and, yes, some of my TBills are only yielding 1.2-1.5% from those purchases but those are in the process of maturing which will allow me to redeploy at higher rates. Holding that money in cash over the past 6 months on average would have been worse.

 

[RE2Boys]

I started buy Treasuries in Feb 2022, mostly 6 month bills. My ladder is not very formal, the goal was to primarily use 6 and 12 month bills aiming for having some maturing each month so I can renew at whatever the going rate is at the time has I do not try to predict the future. I'll start buying 2 or 3 year Treasuries (or CDs) when I suspect the fed has stopped or slowed down the interest rates increases.
Just put an order in for 4 month bills maturing in Jan 2023 as that month was a bit light on renewals. I've got maturities from now through Sept 2023. After the next Fed meeting I'll fill in the Oct 2023 maturities. I've been only buying through new issue window at Fidelity as I don't want to deal with the tax rules of buying at premium or discounts. I don't fully understand the tax rules, I only know that they exist and am too lazy to digest.

 

[Graybeard]

I'm keeping everything short term right now too. Most of my T bills expire 09/27 - 10/11. I will be locking in some 13 week to 26 weeks after the next Fed meeting.

That is pretty much my thinking too though I'll probably wait an extra month or so.

You do realize that you are admitting to trying to time the bond market, right? Not that there's anything wrong with that.

I suppose, I prefer to say that I am being opportunistic and waiting for what looks like a nice yield. I can keep buying short term but at some point I want to lock in purchases when it looks like the Fed is going to take a break or stop. I'm not trying to get the highest yield over the next 6-12 months but I feel yields will drift higher over the coming months.

I am doing the same with the equity market, that is waiting for 3800 to buy and again at 3700 and if it hits 3666 I am going to consider that my lucky break. I've been doing this in my 401k with my Stable Value fund and the S&P 500, I have been burned a couple of times but typically turn a year of "just" holding the Stable Value fund at 2.4 % or 1.85% into a return of 4.5 to 6%. It's more of a hobby, I enjoy looking for a bargain but this year I have done it much less than in past years. I just made a nice $6000 profit over 4 months with $190k that was in 3 or 4 purchases. The odd thing is I have no use for gambling, you couldn't drag me to a casino or get me to buy lottery or Powerball tickets but I find the thrill of doing this in the market to be fun. Yes, it is a type of gambling but the kind I like and I'm not risking my retirement.

 

[jldavid47]

I am doing the same with the equity market, that is waiting for 3800 to buy and again at 3700 and if it hits 3666 I am going to consider that my lucky break.

How lucky would you consider yourself if the S&P 500 hit 3100?

 

[copyright1997reloaded]

How lucky would you consider yourself if the S&P 500 hit 3100?

This.

Or would we be super duper lucky at SP 2000?

In the meantime, yesterday was a six-figure day, in the wrong direction. And that is w/50% cash.

But yes, I do plan on buying (some) at SPX 3350 area. http://tos.mx/7gqLd6n

 

[workmyfingerstothebone]

Just an update , I was able to get in on the new issue 4 & 8 week Tbills announced 9/13/2022. It was brought to my attention, from a member on the site, that Vanguard Treasury screen defaults to "secondary" market, I needed to click the radio button for "auction" .



This is currently a learning experience for me and the posts on this thread are helping tremendously. Amazing how much I've learn since this thread started but only because interest are finally rising . Tired of the measly .05% from bank institutions and credit unions. I'm starting to see more of them raising their rates but slowly.


My next purchase is the 13 week and/or 26 week Tbill.


Now back to my studies on bond buying .

 

[workmyfingerstothebone]

Checking the https://www.treasurydirect.gov/instit/instit.htm?upcoming site I found this information. Some questions: how do they know the 9/13/22 4 week and 8 week rates if the auction doesn't settle till 9/15/22.

Also in the attached image why the different rates, High Rate and Investment Rate?