Treasury Bills, Notes, and Bonds Discussion

[COcheesehead]

+1

It is all to easy to overthink buying bonds. I use a ladder as a way of dollar cost averaging into more Treasury securities. I might add some agency bonds also. If I miss the high point in rates before they dip, so be it. I did a passable job of missing the low point in rates by getting rid of all of my long and mid term bond funds a few years ago when some foreign banks introduced negative interest on savings accounts.

I still find it kinda funny that a forum with general overtones of not timing the equity markets are all about timing the fixed income markets.

 

[MJ]

While I have bought ibonds over the last 10 years through my online Treasury Direct account, I haven't purchased Treasury bills for over 35 years. I am interest in buying 1 year bill. I did notice they are auctioned once a month. I am confused with what I am reading here. When I go online to my Treasury Direct account, I see the various bills that are discussed here and presume they are for sale but was wondering why people are buying them through the various brokerage firms. I would appreciate it if you could explain what I am missing. Thanks

 

[audreyh1]

It’s more convenient for me to buy them through my brokerage. They offer free purchase at auction, optional automatic roll over on maturity, and access to the secondary market if I decide to sell before maturity.

 

[aja8888]

It’s more convenient for me to buy them through my brokerage. They off free purchase at auction, optional automatic roll over on maturity, and access to the secondary market if I decide to sell before maturity.

Plus you can buy them in an IRA through a brokerage.

 

[COcheesehead]

I buy only through my brokerage. Safe guards overbuying as outlined in another thread on here and consolidation of records. Easy in, easy out, easy record keeping.

 

[jazz4cash]

I still find it kinda funny that a forum with general overtones of not timing the equity markets are all about timing the fixed income markets.

I am really surprised how many folks are waiting for the next Fed increase to buy 2 yr bonds. I’m tempted to run the math on that but even if it’s a 5 yr note and the full .75% hike is reflected in the rate, I’m pretty sure I would choose to buy some now and some later (e.g. ladder). Maybe these are huge purchases!

 

[audreyh1]

I still find it kinda funny that a forum with general overtones of not timing the equity markets are all about timing the fixed income markets.

Honestly, plenty of posters here time the equity markets too.

 

[Montecfo]

I still find it kinda funny that a forum with general overtones of not timing the equity markets are all about timing the fixed income markets.

Perhaps those overtones are the problem.

NOT timing bond purchases (and sharply reducing bond duration) when rates are going up from a generational low to much higher levels would be a tremendous missed opportunity.

NOT selling some equities in such a case would ALSO be a huge missed opportunity.

Equities and all but the shortest duration bond have declined sharply under these conditions, just like the financial books say they should.

Everyone times the market. Some folks have been taught and believe that periodic rebalancing is not market timing, but that is not the case.

No right-minded investor ever bought a stock, bond or fund at any time in order to achieve losses.

Calendar timing can be used as a discipline in order to avoid the tendency of many to buy high and sell low. Its goal is to have you purchase what is cheap and sell what is dear.

 

[Chuckanut]

It’s more convenient for me to buy them through my brokerage. They offer free purchase at auction, optional automatic roll over on maturity, and access to the secondary market if I decide to sell before maturity.

And unlike Treasury Direct if you have a problem with your account, they answer their phones a lot more quickly. If it's Schwab or Fidleity you could even go to a local office and get help.

I was locked out of my TD account once and it took well over two hours listening to the same recordings over and over again to finally get help. Not so good. Now I buy them through a brokerage house. Usually Schwab or Fidelity, but there are others.

 

[MarieIG]

Put in an order for 13 weeks on our "house account" which I have to keep short. That will push a little income into next year and save on NYS taxes.

 

[aja8888]

Put in an order for 13 weeks on our "house account" which I have to keep short. That will push a little income into next year and save on NYS taxes.

Keep some dry powder for the AAPL buy!

 

[MarieIG]

Keep some dry powder for the AAPL buy!

Did not forget! (Limit order in for $120. Don't know if it will ever execute, but we'll see.) House account is separate, no stocks. Just Vanguard money market and short-term treasuries.

 

[COcheesehead]

Honestly, plenty of posters here time the equity markets too.

LOL, I am sure you are right.

 

[aja8888]

Did not forget! (Limit order in for $120. Don't know if it will ever execute, but we'll see.) House account is separate, no stocks. Just Vanguard money market and short-term treasuries.

AAPL got down to $129 earlier this year. We will see more down market going forward, at least that's my guess!

 

[MarieIG]

AAPL got down to $129 earlier this year. We will see more down market going forward, at least that's my guess!

My guess too. In fact, I may be annoyed when/ if it does execute! (I'll hold it though.) Actually, I put in round numbers for limit orders at TD and they tend to show up on the buy list a few cents under. Not sure why.

 

[copyright1997reloaded]

Put in an order for 13 weeks on our "house account" which I have to keep short. That will push a little income into next year and save on NYS taxes.

Same.

Only issue is I am running out of money for T-Bills, and I have nothing maturing till mid-December.

 

[MarieIG]

Same.

Only issue is I am running out of money for T-Bills, and I have nothing maturing till mid-December.

I totally understand. I seem to have a T-bill addiction. I have been encroaching upon my cash cushions. My only justification is the shorter T bills are - almost - a cash equivalent and get slightly better tax treatment (NY).

 

[JoeWras]

I totally understand. I seem to have a T-bill addiction. I have been encroaching upon my cash cushions. My only justification is the shorter T bills are - almost - a cash equivalent and get slightly better tax treatment (NY).

16 rungs on my ladder and growing. I may also have a problem.

 

[Another Reader]

Yeah, when you start looking through the change holder in the car and the grocery cash for more investable money, it's time to admit you have a problem.

 

[aja8888]

I have $3,000 in my IRA and about $10 K in my brokerage that are not committed. I can't buy coffee. And that $10 K will be used to pay bills (property tax,etc).

 

[ShokWaveRider]

Has anyone every used Schwab recommended Treasury Ladders?

Are they new issues or secondary market, does it even matter?

Personally I "think" I feel more comfortable with new issues, but I have never purchased a Treasury bond in my life, so I really do not know.

Are secondary market treasuries still guaranteed by the full faith of the Government?

 

[aja8888]

Has anyone every used Schwab recommended Treasury Ladders?

Are they new issues or secondary market, does it even matter?

Personally I "think" I feel more comfortable with new issues, but I have never purchased a Treasury bond in my life, so I really do not know.

Are secondary market treasuries still guaranteed by the full faith of the Government?

Yes.

Secondary issues.

If you don't know, then you don't know!

Yes

 

[ShokWaveRider]

Yes.

Secondary issues.

If you don't know, then you don't know!

Yes

Thanks

 

[aja8888]

Personally I "think" I feel more comfortable with new issues, but I have never purchased a Treasury bond in my life, so I really do not know.

A treasury bond is a treasury bond whether you buy it new or from someone else. No change in any form except the price you pay.

 

[ShokWaveRider]

A treasury bond is a treasury bond whether you buy it new or from someone else. No change in any form except the price you pay.

I suppose it does not matter as long as the return on what one pays is at the current rate. If so, does this mean the current owners are losing money out of the sale?