If it were "better" then all the pro's would be doing it and the "better" would go away.
If you sell a T-Bill and buy another at a higher yield you would be taking on more risk.
What is more important to you? Yield or risk?
If it were "better" then all the pro's would be doing it and the "better" would go away.
I have been using a rolling T-bill "wiggly" ladder for some six months and am curious if too much work will come back to haunt us at tax time. Do the brokers report the payment as interest plus Return of Capital or do we have to break down the $100's into parts ourselves for our tax return?
Duh. I was looking at T-Bills.Kevin M wrote: ↑Thu Dec 15, 2022 12:07 pmThere are 50 TIPS outstanding, not 12.
Kevin
I just checked at Vanguard and the minimum changes with the issue. There were a few with minimum of one but not all.
Because the rep at a trading desk told me so. He could place the trade manually.Elmo wrote: ↑Thu Dec 08, 2022 3:30 pmI am at Fidelity - forgot to say that.Doc wrote: ↑Thu Dec 08, 2022 3:21 pmOr whether it is a margin account.
Even in a cash account there are work arounds. Like placing the trade the day prior to the auction by calling the trade desk after the close of the business day.
Different options are available depending on the broker. Some of these options may be "tricks".
How would calling the trading desk help? Can you explain please?
Or whether it is a margin account.
I think they roll on the NEW issue date. Every 3 months.That makes no sense, since the reopenings are for the same security that was most recently issued as a 10-year:
Kevin, I'm confused.Kevin M wrote: ↑Sat Dec 03, 2022 1:17 pm I see nothing horribly wrong with either of these approaches if one wants to maintain about a constant 10-year maturity for some reason, although there would be slightly less trading costs with a rolling ladder, in which proceeds from a maturing bond (no trading costs) are used to buy the long rung in the ladder at auction (no trading costs
I also like international small cap but for another reason.Random Walker wrote: ↑Fri Nov 25, 2022 7:27 am I like international small cap value. Get factor diversification and perhaps better diversification than large since smaller companies more affected by local economies.
Dave
No gap if you are placing the buy yourself.
The highest T-bill rates were 26 or 52 weeks at the latest auction(s):AndyAndTheTuna wrote: ↑Mon Nov 21, 2022 11:43 am What is everyone's general strategy for taking advantage of the rising rate environment? I have a chunk of short term cash that I can lock up until January 2024; I'd like to capture interest to reinvest in a 529. I'm thinking of rolling 8 week treasuries to capture rising rates; it seems to be one of the steeper points on the yield curve.
Should I go longer, shorter, etc? Hard to say without a crystal ball, I know, but 8 weeks feels right.
It may also depend on your broker. My experience has been that if a sell trade is made prior to the buy order being placed then the buy is OK even if the sell trade settles at a later date.MisterMister wrote: ↑Mon Nov 14, 2022 8:19 am I think this depends on whether you have a margin account. Without a margin account, the timing delay is a quirk that is handled for you automatically in the case of autoroll. But my experience is that, without a margin account, you cannot make a manual purchase without cash being available at the time of the purchase (not the time of settlement of the new purchase
Been there, done that, still do it.KlangFool wrote: ↑Fri Nov 11, 2022 9:28 pm OP,
I keep 10% in SmallCapValue and 10% in Intermediate Term Treasury as part of my mini-Larry portfolio. It is part of the Barbell Investment Strategy. It works very well with rebalancing in a volatile market.
https://www.investopedia.com/articles/i ... rategy.asp
Don't try this unless you believe in it. And, you can rebalance and maintain the AA in a volatile market.
KlangFool
Not only do the rates adjust quite quickly but they also adjust prior to the FED release because the bond traders build their expectation into the rate. So yo don't usually see any significant jumps in rates after the FD release.jebmke wrote: ↑Thu Nov 03, 2022 11:43 am Treasury market is huge and very liquid. Prices adjust quite quickly to what investors expect going forward. Unless the FED releases new information after the hike, it should be fully priced in quite quickly. Keep in mind that the FED overnight rate isn't the only thing that is considered by bond investors.
Been there. Did that. Still doing it.user9532 wrote: ↑Mon Oct 24, 2022 9:00 pm I’m thinking of splitting it into six equal parts and investing in six 6-month T-bills maturing every month and roll it. To start, initially I will buy 1-month, 2-month, 3-month, 4-month, 5-month, and 6-month T-bills. When they mature I will reinvest each in 6-month T-bill. Does this make sense or is there a better way?
So if interest rates drop and you sell your T-Bill before maturity it is interest not cap gains. Hmmnn.vineviz wrote: ↑Sat Oct 22, 2022 10:38 am
The tax treatment of Treasury bills is not affected by how they are bought (i.e. at auction or on the secondary market) and how they are dispensed with (i.e. sold or redeemed). The difference between the purchase price and the dispensation price is treated as interest income in all cases.
Just be aware that not every security on the secondary market with a maturity date of <1 year is actually a Treasury bill. Some of them are notes or bonds that are simply nearing maturity, and their tax treatment can be different from the treatment of Treasury bills.
Other in the fact that my TIPS ladder was liquidated in the 2008 TIPS crash to rebalance into equites I have a very similar position.
Why 4-wk TBills? That's basically cash. Run your calculation again with a 26 or 52 week TBill and see how that works out.
We chose Schwab because their office was 3 miles closer then Fido.
I've been thinking of using two T-bill positions in each account instead of a money market account. Say a December and a June position. Whenever you have an extra $1k in cash just buy more of the longer position on the secondary market. If you need cash sell whichever one makes more sense at the time.Kevin M wrote: ↑Wed Sep 21, 2022 11:57 am
Personally, I would keep a rung in a money market fund, the best of which have yields not too much less than a 1-month Treasury, and they will continue to increase as the fed funds rate continues to increase. I do my cash withdrawals from the MM fund, and only sell Treasuries if there is a better opportunity.
Kevin
The price variation is in the T-bill ladder not the money fund. That variation is one of the things that you have to "pay/incur" for using the ladder.
Duh. I had my mittens on and had to guess how many fingers I was counting.RubyTuesday wrote: ↑Tue Sep 06, 2022 3:18 pmIf you’re using 4-week Tbills shouldn’t we know in Oct whether there was a week delay?
(Schwab there will be, Fidelity there won’t be).
We've been making monthly contributions to our "car fund" since we made the last monthly car loan payment several years ago. We're using Vg Short Term 1-5 Bond Index ETF (BSV) as our car fund.
I agree with that. What I cannot get my mind around is short TIPS vs. T-bills. The bond traders certainly have a good idea of short term inflation and build that into the nominal's price.jeffyscott wrote: ↑Thu Sep 01, 2022 1:55 pm In general, I feel more comfortable going to longer terms with TIPS than nominals, because the inflation risk factor is neutralized.
Same answer. I get the long term but not the short term.jeffyscott wrote: ↑Thu Sep 01, 2022 1:55 pm Other than those possibilities, I am really, essentially, managing a pension fund for our kids.
In general, I feel more comfortable going to longer terms with TIPS than nominals, because the inflation risk factor is neutralized.
My problem with these posts for the last week or so is what do I do if my expected future consumption is ZERO?