Just invested heavily in Treasury Notes

[scottl73]

With both me and my wife now disabled and wanting a fixed income investment to supplement our income now, we just bought 600K of Treasury Notes locked in at 4.5% for 10 years. This will give us about $2,200 (after taxes) each month for 10 years. I couldn't see us tie up the money for longer than that. I believe the percentage is pretty good. Better than they have been the past 20 years. We will also be buying about 350K into the S&P 500 index fund. That we plan on letting grow for 20+ years. I'm only 52 and wife is 48. We will also have about one years income in a high yield savings account for emergency's. We are hoping we don't need the whole $2,200 and will re-invest any extra we have. I know it's super conservative but in our situation, it seems like a smart thing to do. We were offered a 500K annuity at 6.1% that would pay as long as one of us were alive but just couldn't see us losing the principle if God forbid we die young. LOL. In 10 years we will regroup and decide what's our next move. All with Fidelity investments. No fees on treasuries and only 0.015% with the index fund. Who else is buying Bonds/Notes?

 

[aja8888]

With both me and my wife now disabled and wanting a fixed income investment to supplement our income now, we just bought 600K of Treasury Notes locked in at 4.5% for 10 years. This will give us about $2,200 (after taxes) each month for 10 years. I couldn't see us tie up the money for longer than that. I believe the percentage is pretty good. Better than they have been the past 20 years. We will also be buying about 350K into the S&P 500 index fund. That we plan on letting grow for 20+ years. I'm only 52 and wife is 48. We will also have about one years income in a high yield savings account for emergency's. We are hoping we don't need the whole $2,200 and will re-invest any extra we have. I know it's super conservative but in our situation, it seems like a smart thing to do. We were offered a 500K annuity at 6.1% that would pay as long as one of us were alive but just couldn't see us losing the principle if God forbid we die young. LOL. In 10 years we will regroup and decide what's our next move. Who else is buying Bonds/Notes?

Who else is buying Bonds/Notes?

Just about everyone here!

 

[Surewhitey]

We have been accumulating ~$600k in CD's, I-bonds and MM. 75% of this in 5-10 yr CD's @5% average. Not all treasuries, but very similar. We live in TX, so no state tax.

 

[street]

I also did a fixed income with 400K @ 5.8% for 9 years all deferred taxes. I also can take up to 10% of it each year, without any penalties but of course would have to pay the taxes of what I withdraw.

More in fixed account than I wanted but with that interest rate I thought it was a good deal. I won't need any of that to live on so it will compound for the years it is in there.

Not sure I did the right thing or not it is hard to beat the markets for best return.

 

[COcheesehead]

I’ve been buying duration with just a little more risk in corporates, taxable muni bonds. Buying 6% to 7.5% coupons. It will pay us almost $20,000 a month.

 

[marko]

Trying to split the difference. My 2023 return is currently at 10.6% YTD despite having moved a big chunk into Treasuries over the year and plan a bit more after Jan 1.

My concern is that I'll miss a rally if I'm all locked into fixed. About 50/50 now which makes me a little uncomfortable. Current income from the above is satisfactory so not going to go much further.

Treasuries, floating bank rate, MM and high yield bonds.

 

[COcheesehead]

Trying to split the difference. My 2023 return is currently at 10.6% YTD despir having moved a big chunk into Treasuries over the year and plan a bit more after Jan 1.

My concern is that I'll miss a rally if I'm all locked into fixed. About 50/50 now which makes me a little uncomfortable.

What do you need to make your plan work? That should be your focus.

 

[marko]

What do you need to make your plan work? That should be your focus.

My plan is to have fixed deliver a satisfactory enough income and to have the rest in equities for growth.

I think I'm there. Fixed is delivering 5.7% and the total portfolio is at 10.6% YTD. Minor adjustments in January should goose the fixed to about 6.2%.

I intend to return to 70/30 when the Fed cools things down but that could be several years from now.

 

[COcheesehead]

My plan is to have fixed deliver a satisfactory enough income and to have the rest in equities for growth.
I think I'm there.

I feel the same.

 

[marko]

I feel the same.

Thanks. Always respected your input.

 

[DrRoy]

I had a bond mature and found an A rated Corp at 7.2% for 12 years.

 

[Rianne]

We still don't feel comfortable with corporate bonds. We came very close to buying Enron bonds and saw Worldcom and GM as well. They were darlings of Wall Street. We stick with CDs and treasuries. Our entire tIRA is laddered in CDs and treasuries, 1M+. It will provide income and compound interest over time, hopefully.

 

[street]

We still don't feel comfortable with corporate bonds. We came very close to buying Enron bonds and saw Worldcom and GM as well. They were darlings of Wall Street. We stick with CDs and treasuries. Our entire tIRA is laddered in CDs and treasuries, 1M+. It will provide income and compound interest over time, hopefully.

I feel better with those investments over corporate bonds also.

 

[Surewhitey]

We still don't feel comfortable with corporate bonds. We came very close to buying Enron bonds and saw Worldcom and GM as well. They were darlings of Wall Street. We stick with CDs and treasuries. Our entire tIRA is laddered in CDs and treasuries, 1M+. It will provide income and compound interest over time, hopefully.

+2

 

[dmpi]

We still don't feel comfortable with corporate bonds. We came very close to buying Enron bonds and saw Worldcom and GM as well. They were darlings of Wall Street. We stick with CDs and treasuries. Our entire tIRA is laddered in CDs and treasuries, 1M+. It will provide income and compound interest over time, hopefully.

I blew up with Fannie Mae stock but I'm sure the same thing happened to their bond holders. Fortunately I only held a few thousand of it.

 

[Healthy Lifestyle]

I had a bond mature and found an A rated Corp at 7.2% for 12 years.

Curious what percentage of fixed income would you place in this A rated Corporate bond with a 12 year duration?

 

[scottl73]

Corporate bonds just too risky for us because we are unable to work anymore due to spinal cord injuries. 4.5% is good with me for reliable income and low risk.

 

[Montecfo]

Scott, this does seem a sound strategy. This year-to-date has been an excellent time for bond investments.

If you follow the bond boards many of us are buying bonds.

Overall I am closer to 65/35 but the bond side has been getting a lot of attention since I ladder maturities and am mostly in individual bond issues.

All the best.

 

[scottl73]

Scott, this does seem a sound strategy. This year-to-date has been an excellent time for bond investments.

If you follow the bond boards many of us are buying bonds.

Overall I am closer to 65/35 but the bond side has been getting a lot of attention since I ladder maturities and am mostly in individual bond issues.

All the best.

Thank you! I'm new to investing but did a lot of research. It was hard to hit "Buy" with 600K but gives us a good solid foundation/security. Hoping the S&P does a good 8-12% on the long haul.

 

[scottl73]

We still don't feel comfortable with corporate bonds. We came very close to buying Enron bonds and saw Worldcom and GM as well. They were darlings of Wall Street. We stick with CDs and treasuries. Our entire tIRA is laddered in CDs and treasuries, 1M+. It will provide income and compound interest over time, hopefully.

Looks like a great conservative and reliable plan.

 

[scottl73]

My concern is that I'll miss a rally if I'm all locked into fixed. About 50/50 now which makes me a little uncomfortable. Current income from the above is satisfactory so not going to go much further.

Do you see the S&P doing good in 2024? What percentage?

 

[marko]

Do you see the S&P doing good in 2024? What percentage?

Absolutely, positively NO IDEA! It is an election year and there is still talk of a recession, but anyone who says they know is flat out lying.

But I'm typically buy and hold and will ride the ups and downs despite moving a lot around right now per this thread. I just want to be positioned for some growth should the market start behaving. As I noted, I don't see the current rates holding forever but likely for a few years.

 

[MichaelB]

Absolutely, positively NO IDEA! It is an election year and there is still talk of a recession, but anyone who says they know is flat out lying.

Maybe not lying, but certainly either 1) doesn’t understand the unpredictable nature of equity markets or 2) hidden agenda / selling something. Both are to be avoided.

 

[marko]

While on the subject does anyone have an opinion on PDI ( Pimco Dynamic Income) fund? It's a CEF but has paid reliably every month for eleven years along with an occasional year-end special distribution. Currently at 15.5%

I have a small stake (~4%) and don't really plan on increasing it.

 

[COcheesehead]

While on the subject does anyone have an opinion on PDI ( Pimco Dynamic Income) fund? It's a CEF but has paid reliably every month for eleven years along with an occasional year-end special distribution. Currently at 15.5%

I have a small stake (~4%) and don't really plan on increasing it.

cefdata.com will give you all the info you need. I pay particular attention to discount or premium to NAV, if the fund is earning enough to cover its distribution and earnings direction.