|
|
04-24-2022, 12:43 PM
|
#81
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by Lsbcal
Yea if you are comfortable buying online you can do it one day before maturity
|
I prefer online to long waits on the phone with Vanguard.
You mean if I have a bill maturing, the day before I can buy another bill for the same amount (with no funds in the settlement account)?
The original bill matures, money in settlement account, new bill is then funded? What happens with weekends and holidays when the markets are closed?
|
|
|
|
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!
|
04-24-2022, 02:13 PM
|
#82
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
|
Quote:
Originally Posted by Bergamo
I prefer online to long waits on the phone with Vanguard.
You mean if I have a bill maturing, the day before I can buy another bill for the same amount (with no funds in the settlement account)?
The original bill matures, money in settlement account, new bill is then funded? What happens with weekends and holidays when the markets are closed?
|
You probably know this but the individual bond purchase screens are quite different from the funds and/or stocks. If you need help on the first go at this I would call the bond desk and they can walk you through the process. The bond desk number is (800) 669.0514 .
For a maturing Treasury, you would not have the money in the account to purchase so some kind of warning pops up but with settlement in 1 day this apparently works out. I just had the bond desk guy do the purchases since it was in 4 accounts and I could get a special bulk order in 1 go which is a special process.
|
|
|
04-24-2022, 02:26 PM
|
#83
|
Full time employment: Posting here.
Join Date: Oct 2021
Posts: 554
|
Quote:
Originally Posted by Fermion
If interest rates rise to 7% to 8% for a 30 year, then mortgage rates are going to be even higher than that. How does this not cause an epic crash in housing prices when your average home buyer cannot afford $63,000 a year interest on a $700,000 starter home?
|
two comments
1) The median home in America is still around $400k, so not sure I'd generally label $700k as a starter home, although I realize that in parts of CA/NY that is the case
2) We've had over 60% ownership in the US for a long while but in much of the developed world its closer to 40%. It's possible we could see a shift in that direction
I doubt we see 7-8% US bond rates because the stock market and overall economy will crater before RRE does and the fed will be forced to back off and the Fed is targeting 3.5% at the end of 2023. I'd back up the truck on TLT if yields get that high but just seems highly unlikely.
|
|
|
04-24-2022, 02:44 PM
|
#84
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by Lsbcal
You probably know this but the individual bond purchase screens are quite different from the funds and/or stocks. If you need help on the first go at this I would call the bond desk and they can walk you through the process. The bond desk number is (800) 669.0514 .
For a maturing Treasury, you would not have the money in the account to purchase so some kind of warning pops up but with settlement in 1 day this apparently works out. I just had the bond desk guy do the purchases since it was in 4 accounts and I could get a special bulk order in 1 go which is a special process.
|
Okay. I will call the bond desk and talk with them. I have looked at the new issues screen and it seems straightforward to buy. It's the process of rolling over that is less clear.
With the special bulk order did you get better rates? I assume not as it is an auction process.
|
|
|
04-24-2022, 03:13 PM
|
#85
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
|
Quote:
Originally Posted by Bergamo
Okay. I will call the bond desk and talk with them. I have looked at the new issues screen and it seems straightforward to buy. It's the process of rolling over that is less clear.
With the special bulk order did you get better rates? I assume not as it is an auction process.
|
I bought in the secondary market. I think the differences in rates is probably pretty small.
|
|
|
04-24-2022, 07:39 PM
|
#86
|
Full time employment: Posting here.
Join Date: Aug 2018
Posts: 597
|
Quote:
Originally Posted by pb4uski
0.82% is the annualized yield. So if you invest $100, three months later you receive $100.20. Exciting, eh?
|
Ah but if I invest $100,000,000 that's $820k!
Thanks, I thought it was annualized.
My problem is I don't feel comfortable shifting most of my 2 bond funds in my rollover IRA (which I'm still not sure can be done or if it makes sense to do it) into T bills to stop the bleeding because this year I have to start taking a RMD. With equities down, I probably have less losses in those 2 bond funds (Ultra Short Term Bond Fund and Short Term Investment Grade Bond Fund) but I've lost a lot in both of those bond funds. So I'm concerned about locking up money for 6 months or a year for a somewhat good interest rate to avoid nav losses, 3 month rates are pretty anemic. I'd like to put a good chunk into a 1 year T bill but that puts that money off limits for the RMD unless I want to sell at a loss should rates continue their upward march and or equities really tank.
I know a lot of people are in this boat with me but I've never been in this position before and it is very uncomfortable. With my luck, I'll exchange out of the 2 bond funds and rates will slowly drop and then I could be getting back some of the nav loss.
|
|
|
04-24-2022, 10:35 PM
|
#87
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by Graybeard
Ah but if I invest $100,000,000 that's $820k!
Thanks, I thought it was annualized.
My problem is I don't feel comfortable shifting most of my 2 bond funds in my rollover IRA (which I'm still not sure can be done or if it makes sense to do it) into T bills to stop the bleeding because this year I have to start taking a RMD. With equities down, I probably have less losses in those 2 bond funds (Ultra Short Term Bond Fund and Short Term Investment Grade Bond Fund) but I've lost a lot in both of those bond funds. So I'm concerned about locking up money for 6 months or a year for a somewhat good interest rate to avoid nav losses, 3 month rates are pretty anemic. I'd like to put a good chunk into a 1 year T bill but that puts that money off limits for the RMD unless I want to sell at a loss should rates continue their upward march and or equities really tank.
I know a lot of people are in this boat with me but I've never been in this position before and it is very uncomfortable. With my luck, I'll exchange out of the 2 bond funds and rates will slowly drop and then I could be getting back some of the nav loss.
|
You should take comfort in that you have lost a lot less than those of us holding TBM. One possibility is to take RMDs from the Ultra Short Term Bond Fund as that will have the least losses. You will be taking RMDs for quite a few years so moving some of the Short Term Investment Grade Bond Fund to say 1 year Treasuries or perhaps with the current environment 6 month Treasuries and roll them over. If rates keep rising as Powell has indicated they will you could recover those losses in a few years.
Remember also to look at your portfolio as a whole and make a plan not just for this year's RMDs but the RMDs for the next few years.
it is a very uncomfortable position I agree. In December I had a feeling I should reduce the duration of my bond funds and I wish I had.
I'm sure others will come along to provide suggestions but I do not see how fund yields can drop at present unless we have a severe recession and the Fed reduces rates to zero again.
I have not done so yet but looking at Vanguard it seems you can buy Treasuries in a Traditional or Rollover IRA.
|
|
|
04-25-2022, 07:35 PM
|
#88
|
Full time employment: Posting here.
Join Date: Aug 2018
Posts: 597
|
Quote:
Originally Posted by Bergamo
You should take comfort in that you have lost a lot less than those of us holding TBM. One possibility is to take RMDs from the Ultra Short Term Bond Fund as that will have the least losses. You will be taking RMDs for quite a few years so moving some of the Short Term Investment Grade Bond Fund to say 1 year Treasuries or perhaps with the current environment 6 month Treasuries and roll them over. If rates keep rising as Powell has indicated they will you could recover those losses in a few years.
Remember also to look at your portfolio as a whole and make a plan not just for this year's RMDs but the RMDs for the next few years.
it is a very uncomfortable position I agree. In December I had a feeling I should reduce the duration of my bond funds and I wish I had.
I'm sure others will come along to provide suggestions but I do not see how fund yields can drop at present unless we have a severe recession and the Fed reduces rates to zero again.
I have not done so yet but looking at Vanguard it seems you can buy Treasuries in a Traditional or Rollover IRA.
|
Thank you.
I have money in my taxable account's settlement fund as I took a small RMD just to see how it is done. I left it in the settlement fund waiting for a lower level to put it back into the Total Stock Market Index. I lucked out and took it at the end of March when the market was up, now I wish I took the entire RMD. I don't have any money in the rollover IRA's settlement fund so I can't do a test run to see if it'll let me buy a T bill.
I was comparing bond funds today against the 2 I own. The Ultra Short Term Bond Fund hasn't lost as much as I thought, duration is 1 year. The Short Term Investment Grade Fund is where I took a beating, duration is 2.8 years, still small vs TBM Index's duration. While the yield has risen to 3.08% the nav drop due to that is the problem. So yeah, that is the fund I need to do the RMD from and maybe just put the balance into a 1 year T bill as I'll have met the RMD from Vanguard this year. Still will need to do another from my 401k but that's in a Stable Value Fund so timing the RMD really isn't an issue other than when to put that into the taxable account's Total Stock Market Index.
I have always been buy and hold and reinvesting cap gains and dividends. This having to pull money out is a new experience. Would have been better off if I had to do an RMD last year.
|
|
|
04-26-2022, 09:32 AM
|
#89
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,722
|
Quote:
Originally Posted by Lsbcal
You probably know this but the individual bond purchase screens are quite different from the funds and/or stocks. If you need help on the first go at this I would call the bond desk and they can walk you through the process. The bond desk number is (800) 669.0514 .
For a maturing Treasury, you would not have the money in the account to purchase so some kind of warning pops up but with settlement in 1 day this apparently works out. I just had the bond desk guy do the purchases since it was in 4 accounts and I could get a special bulk order in 1 go which is a special process.
|
My bold. We did this and it is very easy. Now we can continue at our own pace with all that bond fund $$ we sold into our tIRA money market. We'll continue to buy treasuries, maybe CDs for a while. Also considering making changes to our AA to more stock funds.
The bond desk is at a different location than the VG headquarters. The CS is efficient.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
|
|
|
04-26-2022, 11:44 AM
|
#90
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by Rianne
My bold. We did this and it is very easy. Now we can continue at our own pace with all that bond fund $$ we sold into our tIRA money market. We'll continue to buy treasuries, maybe CDs for a while. Also considering making changes to our AA to more stock funds.
The bond desk is at a different location than the VG headquarters. The CS is efficient.
|
That's good to know. What kind of ladders are you building in your tIRA?
|
|
|
04-26-2022, 01:43 PM
|
#91
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,722
|
Quote:
Originally Posted by Bergamo
That's good to know. What kind of ladders are you building in your tIRA?
|
13 mo to 2 years so far in T bills. We’re waiting until May to see what the fed does. With the stock market tanking like this, a buying opportunity.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
|
|
|
04-27-2022, 08:41 AM
|
#92
|
Confused about dryer sheets
Join Date: Feb 2020
Location: Dallas
Posts: 3
|
My 401k has an intermediate term bond fund that is getting crushed this year as discussed in this thread. There is also a "fixed income fund" that has consistently returned between 1%-2% every year for the past 20 years (it's made up of mostly GICs and a some other funds used by our pension).
It is my understand that when interest rates rise, bond returns fall. My knowledge on this is elementary.
Is it blatantly obvious that I should have moved my intermediate-term bond fund into the "fixed income fund" given the news that the fed's rates will go from something like 0.5% to 2.5%?
Is it that simple?
|
|
|
04-27-2022, 08:49 AM
|
#93
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,722
|
Quote:
Originally Posted by Rianne
13 mo to 2 years so far in T bills. We’re waiting until May to see what the fed does. With the stock market tanking like this, a buying opportunity.
|
I should clarify, that we used 1/4 of the monies pulled from the bond funds to purchase treasuries. The rest is sitting in the money market until we decide our next move.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
|
|
|
04-27-2022, 10:35 AM
|
#94
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by Rianne
I should clarify, that we used 1/4 of the monies pulled from the bond funds to purchase treasuries. The rest is sitting in the money market until we decide our next move.
|
I was puzzled by the 13 months. Are you buying secondary Treasuries? Why not 52 week or 1 year Treasuries?
|
|
|
04-27-2022, 10:51 AM
|
#95
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
|
Quote:
Originally Posted by mortac8
My 401k has an intermediate term bond fund that is getting crushed this year as discussed in this thread. There is also a "fixed income fund" that has consistently returned between 1%-2% every year for the past 20 years (it's made up of mostly GICs and a some other funds used by our pension).
It is my understand that when interest rates rise, bond returns fall. My knowledge on this is elementary.
Is it blatantly obvious that I should have moved my intermediate-term bond fund into the "fixed income fund" given the news that the fed's rates will go from something like 0.5% to 2.5%?
Is it that simple?
|
The market is very efficient and knows all about what you have written. These decisions are not simple..
Suggest you read up on basics of fixed income before switching horses.
|
|
|
04-27-2022, 12:44 PM
|
#96
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
|
Quote:
Originally Posted by Bergamo
I was puzzled by the 13 months. Are you buying secondary Treasuries? Why not 52 week or 1 year Treasuries?
|
I think it was supposed to be 13 weeks (aka 3 mos).
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
04-27-2022, 02:18 PM
|
#97
|
Recycles dryer sheets
Join Date: Nov 2006
Posts: 321
|
I want to thank Bergamo and Graybeard for asking all these questions. I've learned a lot while reading this thread.
One question that I have: Is there any reason to avoid buying treasury securities in both taxable and deferred accounts at the same time? Any tax pitfalls or other issues to watch out for? I am asking because I tend to keep different mutual funds in taxable vs deferred for ease of tax loss harvesting / avoid wash sale issues, and don't know if there are similar issues to watch out for with treasury securities.
|
|
|
04-27-2022, 03:25 PM
|
#98
|
gone traveling
Join Date: Apr 2022
Posts: 89
|
Quote:
Originally Posted by jazz4cash
I think it was supposed to be 13 weeks (aka 3 mos).
|
Good point. Let's see if Rianne replies.
|
|
|
04-27-2022, 07:32 PM
|
#99
|
Full time employment: Posting here.
Join Date: Aug 2018
Posts: 597
|
Quote:
Originally Posted by Linney
I want to thank Bergamo and Graybeard for asking all these questions. I've learned a lot while reading this thread.
One question that I have: Is there any reason to avoid buying treasury securities in both taxable and deferred accounts at the same time? Any tax pitfalls or other issues to watch out for? I am asking because I tend to keep different mutual funds in taxable vs deferred for ease of tax loss harvesting / avoid wash sale issues, and don't know if there are similar issues to watch out for with treasury securities.
|
Good question, I'm learning a lot in these threads cuz I knew very little.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|