Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-21-2022, 12:42 PM   #881
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
Wow!
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-21-2022, 08:07 PM   #882
Recycles dryer sheets
Graybeard's Avatar
 
Join Date: Aug 2018
Posts: 412
13 week t bill auctioned today with a coupon of 4.324%. Out of curiosity I looked at the secondary market an hour ago. Vanguard had 1 13 week (maturity 2/23/23) and it was less, IIRC 4.18%. While you know the coupon if you buy on the secondary market, today was a case of getting a better yield via the auction.
Graybeard is offline   Reply With Quote
Old 11-21-2022, 11:28 PM   #883
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,450
Quote:
Originally Posted by JoeWras View Post
Judging by some of the posts I'm reading, there are still plenty of folks with money in the bank at sub 1% waiting for the next Fed decision. This is after they waited for the last decision. Analysis paralysis.

Diversify your maturities!
That's crazy. My dry powder, almost 50% of my total at this point is still in a 3.7% money market while I wait for screaming deals.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 11-22-2022, 12:29 AM   #884
Recycles dryer sheets
 
Join Date: May 2017
Posts: 175
Quote:
Originally Posted by pb4uski View Post
That's crazy. My dry powder, almost 50% of my total at this point is still in a 3.7% money market while I wait for screaming deals.
Maybe the best deals have been whispering to you.
NomDeER is offline   Reply With Quote
Old 11-22-2022, 06:45 AM   #885
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 9,449
Quote:
Originally Posted by pb4uski View Post
That's crazy. My dry powder, almost 50% of my total at this point is still in a 3.7% money market while I wait for screaming deals.
It is, but I have to give people a break. (BTW: when I say posts, I mean here and bogleheads. There are more on bogleheads.)

The reason I give people a break is for many it is a big new step. The banks have the comfort of FDIC/NCUA, etc. Some people don't want to transfer their cash to a brokerage.

For others, it is just a matter of mechanics. You see all kinds of posts here and there about mechanics of T-Bills. And many people are not aware what the settlement fund is paying right now.

Once they finally warm up to the idea, they want to go slow, hence the: "Let me wait for the next Fed meeting" theme we see a lot.

The good news is people are waking up to it.
__________________
Retired Class of 2018


JoeWras is online now   Reply With Quote
Old 11-22-2022, 10:40 PM   #886
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
Looks like the 8-week and 4-week auctions are on Wednesday this week instead of Thursday. https://www.treasurydirect.gov/auctions/upcoming/
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 11-23-2022, 12:47 PM   #887
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
This week’s T-bill auction results:

BillsCMBCUSIPIssue DateHigh RateInvestment RatePrice per $100
4-WeekNo912796ZA011/29/20223.970%4.038%$99.691222
8-WeekNo912796ZL611/29/20224.120%4.204%$99.359111
13-WeekNo912796T3311/25/20224.220%4.324%$98.945000
17-WeekNo912796Z8511/29/20224.400%4.527%$98.545556
26-WeekNo912796ZF911/25/20224.520%4.689%$97.727444

Moved up from last week across the board: https://www.early-retirement.org/for...ml#post2857795
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 11-23-2022, 03:55 PM   #888
Recycles dryer sheets
 
Join Date: Jan 2014
Location: New Orleans
Posts: 63
Quote:
Originally Posted by audreyh1 View Post
This week’s T-bill auction results:

BillsCMBCUSIPIssue DateHigh RateInvestment RatePrice per $100
4-WeekNo912796ZA011/29/20223.970%4.038%$99.691222
8-WeekNo912796ZL611/29/20224.120%4.204%$99.359111
13-WeekNo912796T3311/25/20224.220%4.324%$98.945000
17-WeekNo912796Z8511/29/20224.400%4.527%$98.545556
26-WeekNo912796ZF911/25/20224.520%4.689%$97.727444

Moved up from last week across the board: https://www.early-retirement.org/for...ml#post2857795
Thanks Audrey
wdwwildbill is offline   Reply With Quote
Old 11-23-2022, 03:58 PM   #889
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 9,449
52 wks are up at brokerages.

It's going to be an interesting auction next week for the 52s. I'm guessing we'll get a droop from last month.

I'm still buying as I'm intentionally increasing my duration of Bills and Notes.
__________________
Retired Class of 2018


JoeWras is online now   Reply With Quote
Old 11-23-2022, 04:09 PM   #890
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,354
Quote:
Originally Posted by JoeWras View Post
52 wks are up at brokerages.

It's going to be an interesting auction next week for the 52s. I'm guessing we'll get a droop from last month.

I'm still buying as I'm intentionally increasing my duration of Bills and Notes.
As of now, 1 year is still close to this rate hike peak.

I've been quiet on this thread as I haven't had any money to invest unless I sold stocks. But, I just started the transfer of my old mega-corp 401k where I have quite a bit in Stable Value which will be put into a bond ladder. Given the current rate structure, it will be mostly under 2 years in terms of duration, and I'm thinking an average duration around that 1 year peak of the curve spot.

If rates go down, oh well, I then have cash for other things.
If rates go up, my ladder will be emptying the lower rungs and I will redeploy at higher rates.
copyright1997reloaded is online now   Reply With Quote
Old 11-25-2022, 11:35 AM   #891
Dryer sheet wannabe
 
Join Date: Sep 2022
Posts: 16
Quote:
Originally Posted by JoeWras View Post
52 wks are up at brokerages.

It's going to be an interesting auction next week for the 52s. I'm guessing we'll get a droop from last month.

I'm still buying as I'm intentionally increasing my duration of Bills and Notes.
The last 52 week auction result a month ago was 4.730%. So you think the 52 week auction next week will come in under that? Looks like all the shorter term auction results over the last month have edged up each week so curious why the 52 would be different.
eboats is offline   Reply With Quote
Old 11-25-2022, 11:50 AM   #892
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,354
Quote:
Originally Posted by eboats View Post
The last 52 week auction result a month ago was 4.730%. So you think the 52 week auction next week will come in under that? Looks like all the shorter term auction results over the last month have edged up each week so curious why the 52 would be different.
As of right now the yield on 1 year T-Bills is 4.751%.
copyright1997reloaded is online now   Reply With Quote
Old 11-25-2022, 11:53 AM   #893
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
Quote:
Originally Posted by eboats View Post
The last 52 week auction result a month ago was 4.730%. So you think the 52 week auction next week will come in under that? Looks like all the shorter term auction results over the last month have edged up each week so curious why the 52 would be different.
Right now CNBC is quoting 4.75% so I’d be surprised if it came in under (barring any weekend market shocks of course).

In general t-bill rates at auction have been creeping up again compared to 2 weeks ago.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 11-25-2022, 12:32 PM   #894
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 9,449
I was projecting because the 2 yr dropped 1/8% month to month and the Wednesday news was that the Fed governor minutes showed a desire to slow the hikes.

Based on that I thought it could drop a few bp. I'm more than happy to see it flat or up a few bp.
__________________
Retired Class of 2018


JoeWras is online now   Reply With Quote
Old 11-25-2022, 12:34 PM   #895
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
Well we’ll find out soon enough. Bond market was open today and that news is in.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 11-26-2022, 04:05 PM   #896
Full time employment: Posting here.
 
Join Date: Apr 2007
Posts: 763
I watched a video today about bonds and saw how a 10-year note will have its price rise by 9.5% or so if the interest rate drops by 1%.

What I am wondering about is the rationale for trading such a windfall price increase.

That is, if I buy a 10-year note at 4% and the Fed cuts by 1% next year, it seems I could sell the note and make a 9.5% capital gain. However, if I were to want to maintain my fixed income allocation, I would have to buy another bond and it would seem that the price of the new bond would be higher (or the rate lower) cancelling out my windfall profit. It seems this is similar to selling my house as prices rise, only to have to buy a similar house with the proceeds.

Is the idea for doing this sort of trade that the environment that would lead to the Fed cutting rates would include a severe drop in the stock market, so I would be taking the proceeds from selling the 10-year note at a capital gain and buying lower priced stocks instead of replacing the bond?
joesxm3 is offline   Reply With Quote
Old 11-26-2022, 04:22 PM   #897
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,443
Quote:
Originally Posted by joesxm3 View Post
I watched a video today about bonds and saw how a 10-year note will have its price rise by 9.5% or so if the interest rate drops by 1%.

What I am wondering about is the rationale for trading such a windfall price increase.

That is, if I buy a 10-year note at 4% and the Fed cuts by 1% next year, it seems I could sell the note and make a 9.5% capital gain. However, if I were to want to maintain my fixed income allocation, I would have to buy another bond and it would seem that the price of the new bond would be higher (or the rate lower) cancelling out my windfall profit. It seems this is similar to selling my house as prices rise, only to have to buy a similar house with the proceeds.

Is the idea for doing this sort of trade that the environment that would lead to the Fed cutting rates would include a severe drop in the stock market, so I would be taking the proceeds from selling the 10-year note at a capital gain and buying lower priced stocks instead of replacing the bond?
Unlike a house you don't HAVE to replace a bond with another bond.
There are a lot of articles hitting the interwebs now about how bond traders should be going long duration soon if not now in anticipation of the Fed having to cut rates sooner than later. Buy doing so they are looking to capture the 9.5% in your example and go on to pillage the next perceived trend.

As far as your fixed income allocation, you would have to have some spreadsheeting to compute the trade off of selling for 9.5% gain vs. holding the same issue till duration at it's current rate of return to see which nets more $ in the same time frame.
Spock is offline   Reply With Quote
Old 11-27-2022, 05:25 PM   #898
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 2,354
Now that my 401(k) is moved and I have a bunch of $ (that was in stable value at 2.5x%) available, I'm buying a slug of the 1-year auction on Tuesday, along with a smaller amount of the 26-week auction Monday. Still trying to decide on the 13-week also. Seems like a decent time to hit the peak of the curve (about 1 year timeframe)?
copyright1997reloaded is online now   Reply With Quote
Old 11-27-2022, 06:50 PM   #899
Recycles dryer sheets
 
Join Date: Mar 2019
Posts: 405
Quote:
Originally Posted by joesxm3 View Post
I watched a video today about bonds and saw how a 10-year note will have its price rise by 9.5% or so if the interest rate drops by 1%.

What I am wondering about is the rationale for trading such a windfall price increase.

That is, if I buy a 10-year note at 4% and the Fed cuts by 1% next year, it seems I could sell the note and make a 9.5% capital gain. However, if I were to want to maintain my fixed income allocation, I would have to buy another bond and it would seem that the price of the new bond would be higher (or the rate lower) cancelling out my windfall profit. It seems this is similar to selling my house as prices rise, only to have to buy a similar house with the proceeds.

Is the idea for doing this sort of trade that the environment that would lead to the Fed cutting rates would include a severe drop in the stock market, so I would be taking the proceeds from selling the 10-year note at a capital gain and buying lower priced stocks instead of replacing the bond?

As a fixed income investor fluctuating bond prices are irrelevant if you hold to maturity. If you are trading 10 year Treasury Note futures then it’s quite relevant.
jldavid47 is offline   Reply With Quote
Old 11-27-2022, 07:04 PM   #900
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 33,033
Quote:
Originally Posted by copyright1997reloaded View Post
Now that my 401(k) is moved and I have a bunch of $ (that was in stable value at 2.5x%) available, I'm buying a slug of the 1-year auction on Tuesday, along with a smaller amount of the 26-week auction Monday. Still trying to decide on the 13-week also. Seems like a decent time to hit the peak of the curve (about 1 year timeframe)?
Maybe you guys will get 4.78%+. The 26 week is very close to that too, around 4.74%.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 29 (0 members and 29 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Question re: buying treasury bills thru Treasury Direct lucky penny FIRE and Money 7 04-19-2022 04:39 AM
Treasury Bills Notes Bonds Co-Ownership CaptainO FIRE and Money 7 04-15-2018 05:31 AM
when are treasury bond etf's not treasury bond etf's ? mathjak107 FIRE and Money 1 07-20-2015 08:26 AM
treasury notes gerrym51 FIRE and Money 2 04-18-2013 01:59 PM
CD or Treasury bills and notes? Natalie FIRE and Money 4 07-14-2003 08:46 PM

» Quick Links

 
All times are GMT -6. The time now is 01:43 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.