Muni Bond (and Muni Bond Fund) Discussion

[npage]

Thanks, I am not surprised JPM does not have my interests first I looked at it and did a quick average calculation and realized it was not better than a straight 5 year so why bother.

[jazz4cash]

Quote:

Originally Posted by njhowie Step CDs are really just marketing tools, concocted to reduce the risk of the issuing bank! (and entice the buyer with the potential of higher rates in the future) .

I tend to agree but the ones I’ve seen are issued by a credit union and not callable. I assume your comments are primarily for brokered products?

[njhowie]

Quote:

Originally Posted by jazz4cash I tend to agree but the ones I’ve seen are issued by a credit union and not callable. I assume your comments are primarily for brokered products?

Yes

If you have access to non-callable step CDs, that is a better product in my view.

[njhowie]

10-year treasury now below 3.0% again.

[madatrub]

Quote:

Originally Posted by njhowie 10-year treasury now below 3.0% again.

Head scratcher. the 30 year mortgage/10 Yr Treasury gap has to be the widest its been in some time.

[COcheesehead]

Quote:

Originally Posted by madatrub Head scratcher. the 30 year mortgage/10 Yr Treasury gap has to be the widest its been in some time.

You think? I haven’t followed that relationship, but they seemed to rise simultaneously.

[madatrub]

Quote:

Originally Posted by COcheesehead You think? I haven’t followed that relationship, but they seemed to rise simultaneously.

only 3 times in the last 20 years has it crossed ~2.2%, 2 out of 3 were recessions.

[npage]

Quote:

Originally Posted by njhowie 10-year treasury now below 3.0% again.

Non callable brokered CD payable monthly 3.75%, Celtic Bank Utah.

[nwsteve]

Quote:

Originally Posted by npage Non callable brokered CD payable monthly 3.75%, Celtic Bank Utah.

If I am looking at same on Fido, above issue is a 9 year issue. Celtic also offer 3.65 at 7 yr.

[COcheesehead]

Quote:

Originally Posted by madatrub only 3 times in the last 20 years has it crossed ~2.2%, 2 out of 3 were recessions.

Very interesting.

[npage]

Quote:

Originally Posted by nwsteve If I am looking at same on Fido, above issue is a 9 year issue. Celtic also offer 3.65 at 7 yr.

Ooops, yes, 9 yr. 3.75% 7 yr. 3.65%, 5 year 3.35%. All payable monthly and not callable.

Of that bunch seems the 7 year is a sweet spot. But all together not bad for 7 and 10 year. Depending on your tax situation it is above 3% net of tax.

For me at least makes me think about longer term for money not needed until then. I get the idea of going shorter but if in two years when a shorter term CD comes due these rates are long gone, well...you know..of course we don't know.

[nwsteve]

Quote:

Originally Posted by npage Ooops, yes, 9 yr. 3.75% 7 yr. 3.65%, 5 year 3.35%. All payable monthly and not callable. Of that bunch seems the 7 year is a sweet spot. But all together not bad for 7 and 10 year. Depending on your tax situation it is above 3% net of tax. For me at least makes me think about longer term for money not needed until then. I get the idea of going shorter but if in two years when a shorter term CD comes due these rates are long gone, well...you know..of course we don't know.

Personally, given extraordinary uncertainties, I more inclined to stay under 3 years for now. To add to your issues, I am more attracted to the 3.3% issues for two years for which Fido shows several including a USB with no call and monthly pay

[npage]

Yeah I can see that side too. My basic thought process depending on which way the wind blows is taking it all to three years say. 6 to 18 months, inflation tamed, fed lowers rates, we never see these rates again. My 2 and 3 years come due and I wish I had a bunch of longer term paying 3 to 4%.

I have some USB when they first hit 3%, same monthly. They were actually 30 month issue ending 11/24. Should probably sell and go for the 3.3%.

And all of this is tinkering with 20% of portfolio that is kept in cash/cd/muni/treasury. So it is the safest stuff I own and tweaking for a couple tenths but none of it will greatly change my life a few tenths one way or the other, unless I could have the entire 20% paying 10% in treasury or CD's ;-) Then I go from Kia Soul to Hyundai Santa Fe lavish life!

[Born2Fish]

I bought Goldman Sachs 3 yr non-callable at 3.35% last week.

Was hoping to see more opportunities this month.

[npage]

Thought to long, Celtic ones went quick. We'll see what the next round holds.

[njhowie]

Bond market doubts Fed's ability to thread the needle

https://finance.yahoo.com/news/bond-...191844097.html

We (some of us) saw this coming.

[Owenliruna]

Quote:

Originally Posted by COcheesehead I used the last of my cash allocated to my ladder earlier this week. Bought 20, 2029, 4.4% double tax free muni’s. I doubled the yield of my ladder since March. I have $25,000 maturing next month and about $130,000 more maturing into Fall. Yields might be higher then, but I sorta doubt it. I might be very happy with what I have, locking in some of these higher yields under 10 years.

How possible could you really do that I try as much to get there but I keep falling apart

[aja8888]

Quote:

Originally Posted by njhowie Bond market doubts Fed's ability to thread the needle https://finance.yahoo.com/news/bond-...191844097.html We (some of us) saw this coming.

A lot of wishful thinking in that article by the wall street traders who are going to get creamed when rates go further up and stocks slide down. Powell's at the point of no return.....higher interest rates and QT for everybody.

[njhowie]

Quote:

Originally Posted by aja8888 A lot of wishful thinking in that article by the wall street traders who are going to get creamed when rates go further up and stocks slide down. Powell's at the point of no return.....higher interest rates and QT for everybody.

Powell only has control over short term rates. Market controls everything else. He's simply going to drive an inverted yield curve which will further lead to a recession.

It's not just Wall Street traders who've been buying up bonds and fixed income - look at the posts here. Folks have been flocking to lock in their 3% and higher yields.

Lastly, the market looks forward. Powell may well get to 3% or higher. But the market is looking beyond that and what comes next. Depending how deep a recession he wants to throw the country in to, he's going to be lowering rates just as quickly. Other economists are already going on record that rates will have to be lowered in 2023.

We'll see how it plays out. Should longer term rates move higher, great - I want to lock in more before this is all over.

[COcheesehead]

Quote:

Originally Posted by Owenliruna How possible could you really do that I try as much to get there but I keep falling apart

A few weeks ago there were still bonds like that available. Now you have to go longer in duration because yields have dropped.

Over my investing lifetime, I have bought hundreds of bonds. It’s almost intuitive now, but it all starts with buying a single bond. It gets easier and your confidence grows.