Treasury Bills, Notes, and Bonds Discussion

[audreyh1]

I don't know why you all are bothering with the auction when secondary market is so much easier. You might pay just a bit more in spreads but it is simple and easy and no waiting.

I like buying at auction: it’s simple and easy and I can order a few days ahead of the auction including after market hours and over the weekend for some. I don’t care about the waiting part.

 

[Sunset]

I don't know why you all are bothering with the auction when secondary market is so much easier. You might pay just a bit more in spreads but it is simple and easy and no waiting.

Auction buying is easier and cheaper and can be done on Saturday or Sunday so that is why I do the auctions.

 

[JoeWras]

Some people buy used cars, others buy new. It isn't an exact analogy, but hey. Both markets are necessary to be liquid and functioning for a healthy economy.

Treasury secondaries are a lot less complex than muni bonds at least.

 

[wdwwildbill]

Would this be advisable in an IRA or cash account ?

 

[MarieIG]

I will be looking at the next auction: if available a 13 week and a 26 week.

 

[audreyh1]

Would this be advisable in an IRA or cash account ?

If your broker supports it why not?

 

[MarieIG]

Would this be advisable in an IRA or cash account ?

I've got them in my taxable and my traditional IRA.

 

[Sunset]

Would this be advisable in an IRA or cash account ?

If your State taxes interest, then it's great in a taxable account as Treasuries are not taxable by States, just Fed taxes.

 

[Vincenzo Corleone]

The investment rate on the latest 52-week auction is 4.73%. I'll take it, thank you.

 

[wdwwildbill]

I've got them in my taxable and my traditional IRA.

Thanks for the info !! I am learning... slow but getting there

 

[MarieIG]

Thanks for the info !! I am learning... slow but getting there

I just started this year too! I did a "trial run" with the minimum amount, before I made larger purchases. Make sure your broker does not charge you for the treasury auctions, as there are brokers which don't. Good luck!

 

[jldavid47]

The investment rate on the latest 52-week auction is 4.73%. I'll take it, thank you.

Me too. I bought them in three separate accounts today.

 

[wdwwildbill]

I just started this year too! I did a "trial run" with the minimum amount, before I made larger purchases. Make sure your broker does not charge you for the treasury auctions, as there are brokers which don't. Good luck!

Thanks for the encouragement !! I have Fidelity so I'll check with them ..

 

[audreyh1]

Thanks for the encouragement !! I have Fidelity so I'll check with them ..

Its quite easy with Fidelity. There is no charge for buying treasuries at auction. Under "Fixed Income, Bonds & CDs" which you can find under the research tab, click on the "New Issues" tab, and treasuries for auction will be listed there shortly after they are announced. Usually the auctions are announced a few days ahead, sometimes just 1 day ahead, so it is useful to become familiar with the US Treasury auction schedule. https://www.treasurydirect.gov/auctions/upcoming/

Once available you can place an order ahead of the auction.

 

[MarieIG]

Put in an order for a four week in my taxable equities' account. Will not make much on it, but will it not tie up the money for long, and will get the funds out of the stinkin' sweep account.

I didn't see the 17 week over on TD, but did see it on Vanguard. (Don't want tomorrow's 17 week in any event.)

 

[Graybeard]

I like buying at auction: it’s simple and easy and I can order a few days ahead of the auction including after market hours and over the weekend for some. I don’t care about the waiting part.

Auction buying is easier and cheaper and can be done on Saturday or Sunday so that is why I do the auctions.

In addition to that, your treasuries if bought on some kind of schedule, weekly, every other week, monthly, will mature at regular intervals. Buying on the secondary market results in treasuries maturing all over the calendar. I've done both and prefer auction but there is nothing wrong with buying on the secondary market if that is what you prefer.

 

[NomDeER]

In addition to that, your treasuries if bought on some kind of schedule, weekly, every other week, monthly, will mature at regular intervals. Buying on the secondary market results in treasuries maturing all over the calendar. I've done both and prefer auction but there is nothing wrong with buying on the secondary market if that is what you prefer.

I have bought Treasuries on the secondary market and at auction. For me, it is the secondary market that most effectively and efficiently has allowed me to have the Treasuries mature at more regular intervals. That is because I am not buying at regular intervals and I can buy a 14-month Treasury on the secondary market but not at auction. For each person, it will depend on their own circumstances whether auction or secondary market is better.

 

[audreyh1]

Yep, totally personal preference and someone might even switch if their objective changes.

 

[JoeWras]

The investment rate on the latest 52-week auction is 4.73%. I'll take it, thank you.

Looks like the market has baked in much of the anticipated rate increase. That's a 0.6% increase over last month.

Interestingly, I noticed that the results indicate about 5% of the accepted bids were noncompetitive. Compare to January when it was only 1%.

The non-competitive bid amounts track retail investor participation. People are slowly waking up to using Treasuries. We see that on this thread too.

 

[wdwwildbill]

Its quite easy with Fidelity. There is no charge for buying treasuries at auction. Under "Fixed Income, Bonds & CDs" which you can find under the research tab, click on the "New Issues" tab, and treasuries for auction will be listed there shortly after they are announced. Usually the auctions are announced a few days ahead, sometimes just 1 day ahead, so it is useful to become familiar with the US Treasury auction schedule. https://www.treasurydirect.gov/auctions/upcoming/

Once available you can place an order ahead of the auction.

Thanks so much for sharing. Really helps me learn. I will look on Fidelity and get use to where to go. Never done any of that, only stocks,etf's etc.

 

[audreyh1]

17 week auction results

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
17-Week	No	912796Y86	11/08/2022	4.280%	4.402%	$98.585222

 

[Fermion]

Ok, so I still have about $130,000 I want to put in short term (2 years or less) treasuries. What is a good deal right now? Is there an upcoming auction I should look into?

 

[audreyh1]

There are auctions every week for up to 26-week t-bill. The 52-week is auctioned once a month.

The 1-year (52-week) t-bill seems to be offering the best yield right now, but the 26-week is very close and higher than the 2-year note.

Treasury regularly updates their upcoming auctions page plus publishes results from the most recent auction for each bill/note/bond. Once the auctions are announced, the t-bills are usually available to order via your broker under “new issues”. https://www.treasurydirect.gov/auctions/upcoming/

The overall planned schedule https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf

 

[JoeWras]

Ok, so I still have about $130,000 I want to put in short term (2 years or less) treasuries. What is a good deal right now? Is there an upcoming auction I should look into?

Audrey gave you the schedule. I've been working on a ladder for over 6 months now so I have 20 rungs.

If you want to do auctions, which is what I also like, here's just a suggestion considering your amount. Build a mini-ladder since rates are still rising.

Start by dropping it in your Vanguard or Fidelity account where the settlement fund will pay at least 2.8% or so while you do this.

Then, over the span of a month, try something like this:
Week 1:
- 20k to 4-week bill
- 20k to 8-week bill
- 20k to 13-week bill
- 20k to 26-week bill

Week 2:
- 20k to 13-week bill

Week 3:
- 20k to 13-week bill

Week 4:
- 10k+ to 8-week bill (you'll have more than 10k due to buying the zeroes at a discount)

Week 5:
- Reinvest 20k from 4 week matured bill to 13 or 26 week bill or perhaps even go longer and start rolling to 52wk or even 2 year notes.

Subsequent weeks:
- continue reinvesting and consider lengthening duration

It is a short ladder, but starts giving you options right away. Keep in mind it requires paying attention when bills mature. I would not use Fidelity's auto-roll because we don't know what the Fed will do... although it looks like rising rates are here for the next 3 months at least.

 

[MarieIG]

Looks like the 13 and 26 are coming out today. I'm waiting for them to be available to buy. Last I checked, I was not able to order them.