We are entering a "Golden Period" for fixed income investing

[Freedom56]

What qualifies as Jumbo? 100k and above?

Yes

 

[Car-Guy]

Even better, if you are buying jumbo CDs, you can call the Fidelity bond desk and get a discount on those CDs for an even better yield.

Do you have a ballpark # on how much more? Where is the decimal point?
.x or .0x... I'd try to make the call for .x but not .0x.

 

[Freedom56]

Do you have a ballpark # on how much more? Where is the decimal point?
.x or .0x... I'd try to make the call for .x but not .0x.

I got 100K of the the 18 month Zion 5.4% for $995 instead of $1000 for a total of $99500. The YTM is then 5.75% for 18 months.

 

[Car-Guy]

I got 100K of the the 18 month Zion 5.4% for $995 instead of $1000 for a total of $99500. The YTM is then 5.75% for 18 months.

For that I'll try it with Schwab.

 

[Mulligan]

It's hard to turn down the extra dollars in an 18 month CDs at 5.4% as compared to 4+% CDs in the 4 to 5 year area. A bird in the hand....

I hope you got some 4-5 yr noncallable CDs when they went over 5% a couple weeks ago. The market and bond yields are getting squeezed to where the yield is back at the very short end. Reinvestment risk rears its ugly head there.

 

[harley]

Just trying to read this thread is almost like work. Luckily I've used up my cash for now, so I don't have to do the follow-up work of buying the investments. Y'all are wearing me out.

 

[copyright1997reloaded]

Just trying to read this thread is almost like work. Luckily I've used up my cash for now, so I don't have to do the follow-up work of buying the investments. Y'all are wearing me out.

Think of it as a j*b.

Did I say that? Sorry, hopefully I won't be banned.

 

[COcheesehead]

Reinvestment risk has its remedies.

 

[Chuckanut]

I hope you got some 4-5 yr noncallable CDs when they went over 5% a couple weeks ago. The market and bond yields are getting squeezed to where the yield is back at the very short end. Reinvestment risk rears its ugly head there.

I have some non callables. I pretty much won't buy a callable CD unless it offers at least 1.2% over the non-callable. I consider them speculative and weak rungs on my ladder.

 

[pb4uski]

For that I'll try it with Schwab.

Let me know how you make out on that.

 

[Car-Guy]

Will do!

 

[Freedom56]

Fidelity has a 3 year non-callable CD at 5.1%

 

[MercyMe]

Fidelity has a 3 year non-callable CD at 5.1%

Strange that I can find this CD by entering the CUSIP, but otherwise it does not show up on Fidelity's listings. I must be missing something.

 

[Mulligan]

We are entering a "Golden Period" for fixed income investing

Strange that I can find this CD by entering the CUSIP, but otherwise it does not show up on Fidelity's listings. I must be missing something.

City National now also has a 5% Five year non callable out there. Cusip 178180GY5….. Conversation in the City National “Suit room”. ….”Boss we are running low on funds from the bank run, what should we do?” ….”Johnny issue up some fat 5% 3 and 5 year noncallable CDs and that will quickly take care of the problem. Now get out of here, so I can leave as my tee time is in 45 minutes”…

 

[COcheesehead]

Strange that I can find this CD by entering the CUSIP, but otherwise it does not show up on Fidelity's listings. I must be missing something.

Search under new. It’s about 30-40 listings down.

 

[MercyMe]

Thanks Mulligan and COcheesehead.

And for both of these, I may be able to call the bond desk at Fidelity and squeak out an extra couple of basis points? (Freedom mentioned this I think)

 

[Mulligan]

Thanks Mulligan and COcheesehead.

And for both of these, I may be able to call the bond desk at Fidelity and squeak out an extra couple of basis points? (Freedom mentioned this I think)

I couldnt help myself and took another small bite of the 5 year 5% noncallable one myself. Who said conservative yield chasing wasnt exciting. One day the multi year Treasuries were paying more than the CDs, and now they are not even within ear shout of CDs.

 

[Freedom56]

Bloomberg reported that a record $230 billion flowed into treasury MM funds during the past two weeks and at the same time $10.8B exited MM funds that invest in short term commercial paper. The massive inflow into treasury MM funds is pulling yields down at the short end. To counter balance we have all those small to mid sized banks increasing liquidity by issuing CDs and stepping over each other to get in front of the line by increasing yields.

 

[MercyMe]

Fidelity has a 3 year non-callable CD at 5.1% - DSN3N4768

This one is now sold out.

 

[Freedom56]

I couldnt help myself and took another small bite of the 5 year 5% noncallable one myself. Who said conservative yield chasing wasnt exciting. One day the multi year Treasuries were paying more than the CDs, and now they are not even within ear shout of CDs.

Wall Street is full of morons. One of the safest asset classes, CDs, are yielding more than treasuries, and high grade corporate bonds. How long can that last?

Even worse, the steep inversion in the yield curve is creating and even more dangerous situation for bond index funds as they sell short duration at losses and buy longer duration at low coupons.

 

[Mulligan]

Wall Street is full of morons. One of the safest asset classes, CDs, are yielding more than treasuries, and high grade corporate bonds. How long can that last?



Even worse, the steep inversion in the yield curve is creating and even more dangerous situation for bond index funds as they sell short duration at losses and buy longer duration at low coupons.

You know Freedom, an easy way to lock in some cap gains and yet maintain the present yield would be for people who recently bought treasuries at 5% to sell them. And then rotate into the 5% CDs. Assuming tax situation or account held in is applicable.

 

[Freedom56]

You know Freedom, an easy way to lock in some cap gains and yet maintain the present yield would be for people who recently bought treasuries at 5% to sell them. And then rotate into the 5% CDs. Assuming tax situation or account held in is applicable.

I did that last week. I dumped my treasuries for a gain and bought CDs from Discover, Synchrony, and Morgan Stanley. It did that for our accounts as well as the accounts for my parents that I manage for them. The spreads are even better this week but the CD yields are a little lower.

 

[copyright1997reloaded]

You know Freedom, an easy way to lock in some cap gains and yet maintain the present yield would be for people who recently bought treasuries at 5% to sell them. And then rotate into the 5% CDs. Assuming tax situation or account held in is applicable.

I was just mentioning that on another thread...and I just sold an almost 1-year T-BILL (CUSIP 912796Z28) that when issued had a 5.081% yield. (Current yield about 4.2% if purchased today and HTM.)

Now to find a suitable CD to fill the void.

 

[Freedom56]

Amex banks now has a 4.95%/3year non-callable at Fidelity. It's a matter of time before we see a smaller bank step in front of the line with a 5/3 CD.

UPDATE: City National 5.1/3 year and 5/5 are back.

 

[Freedom56]

This one is now sold out.

It's back along with the 5/5 from City National.