Waiting for 10 yr Treas. rate to rise , am I beating a dead horse ?

[Lakewood90712]

I have been waiting , likely in vain, for the 10 year to head back up near 3%.

The QE Europe stuff seems to have money heading to the 10 year , driving down the rate.

Buy now or wait till later in the year ?

 

[LOL!]

I thought some 7-year CDs sometimes appear with a 3% rate. FDIC-insured, too.

 

[brewer12345]

I have given up on treasuries, especially longer term. Much, much rather pick out CD deals when they show up. Note that I am talking about direct CDs, not brokered.

 

[Lakewood90712]

I found 2.5 on 7 yr and 2.75 apy on 10 yr fdic cd's, at mid direct . The main reason for seeking the bond would be a big bump in value selling it if rates again dropped. Mid first direct is in OK. don't know if financial trouble in the oil patch could put them at risk. FDIC insured, so I guess it's safe.Early w/d is really high 2 years int on 7 yr, 3 years on the 10 yr.

Prob. am better off with a cd.

Never held a 10 yr. bond. Does the gov. issue a 1099 each year, or is it differed until sold/ matured like savings bonds?

 

[jim584672]

Good thing about Treasury Bonds, Notes, Bills is no state income tax on the interest.

 

[mrfeh]

I have been waiting , likely in vain, for the 10 year to head back up near 3%.

The QE Europe stuff seems to have money heading to the 10 year , driving down the rate.

Buy now or wait till later in the year ?

What is the purpose/time horizon of the money?

 

[LOL!]

Good thing about Treasury Bonds, Notes, Bills is no state income tax on the interest.

What's a state income tax?

 

[jim584672]

You might want to check your Broker to see if they have any 3% CDs available. I see 10 and 20 years @ 3%.

 

[audreyh1]

Even if the 10 year treasury rate does go up, is it going to get much past 3 or 3.5%? I could see it not exceeding that level for a long time.

I keep most of my fixed income allocation in a diverse mix of intermediate bond funds. I plan to hold these for decades, so I don't sweat the next five years. I've already held them for 15 years.

 

[Lakewood90712]

What is the purpose/time horizon of the money?

Indefinite time, want to at least keep pace with inflation , be semi liquid to buy the
"once in a lifetime opportunity " rental property.

What's a state income tax?

Very funny

 

[mrfeh]

Indefinite time, want to at least keep pace with inflation , be semi liquid to buy the
"once in a lifetime opportunity " rental property.

Then I suggest intermediate bond market. Don't try to time interest rates.

If you think you may need the funds within 3 years, put some of it in short term bond (ie. VFSUX).

 

[gcgang]

I have been waiting , likely in vain, for the 10 year to head back up near 3%.



The QE Europe stuff seems to have money heading to the 10 year , driving down the rate.



Buy now or wait till later in the year ?

Don't wait. If it's right for your situation, buy now. If rates go up, you can always do a bond swap and deduct the loss.

1099 is issued each year, there is no deferral like savings bonds.


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[mathjak107]

the best deals in bonds today are BBB rated or Baa in moody's system . they pay a nice premium over investment grade , they have a very very low risk of default.

a few funds actually zoom in on that area.

BLADX FROM BLACK ROCK FOR EXAMPLE.

PBBBX ALSO .

if BBB were a neighborhood it would be the brooklyn of the bond market .

 

[dallas27]

the best deals in bonds today are BBB rated or Baa in moody's system . they pay a nice premium over investment grade , they have a very very low risk of default.

a few funds actually zoom in on that area.

BLADX FROM BLACK ROCK FOR EXAMPLE.

PBBBX ALSO .

if BBB were a neighborhood it would be the brooklyn of the bond market .

The average is a little over 1.2% defaults according to the prof in the bond course i'm taking.


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[mathjak107]

but if you buy a fund with hundreds of them as low as the default rate is the odds are even lower .