Search found 10592 matches

by Doc
Sun Jan 08, 2023 11:35 am
Forum: Investing - Theory, News & General
Topic: How to determine to sell T-Bills on secondary market
Replies: 3
Views: 546

Re: How to determine to sell T-Bills on secondary market

SuperDave wrote: Sun Jan 08, 2023 11:05 am Now that I am investing in T-Bills of various maturities (in a ladder), is there calculation or tool that one can use to determine if it would be better to sell a T-Bill on the secondary market and reinvest in a higher yielding Bill?
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?
by Doc
Mon Jan 02, 2023 11:09 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

T-Bills 24 wk vs 52 wk

What are the pros and cons of buying a new 24 wk bill at auction vs a "used" 52 wk bill with the same maturity on the open market.
by Doc
Thu Dec 29, 2022 10:12 am
Forum: Investing - Theory, News & General
Topic: roll call: 2022 bear market rebalance
Replies: 43
Views: 5198

Re: roll call: 2022 bear market rebalance

marcopolo wrote: Thu Dec 29, 2022 2:54 am We maintain a 60/40 AA target.
We are in are in retirement, so withdrawals come from whatever asset is over-represented. This nudges our AA towards target.
We actively rebalance using 5% bands.
Ditto.
by Doc
Wed Dec 21, 2022 11:08 am
Forum: Investing - Theory, News & General
Topic: Foreign tax paid on Total World Stock?
Replies: 10
Views: 1184

Re: Foreign tax paid on Total World Stock?

Once upon a time a long, long time ago I stopped buying foreign stock ETFs/mutual funds in taxable accounts if they were US based.

This was because the foreign tax was taken out of the dividends already without the amount being addressed. I think therefore that no foreign tax on US based funds will show up on one's 1099's.

Perhaps someone with more current data can correct me if needed.
by Doc
Mon Dec 19, 2022 3:55 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Kevin M wrote: Mon Dec 19, 2022 3:25 pm I've decided that box spreads are too much work for the relatively small extra TEY, so am just rolling into Treasuries now.
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?
by Doc
Thu Dec 15, 2022 2:20 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Kevin M wrote: Thu Dec 15, 2022 12:07 pm
Doc wrote: Thu Dec 15, 2022 11:57 am
asif408 wrote: Thu Dec 15, 2022 10:27 am I'll have to check the Vanguard account periodically to see if the minimum quantities change.
I just checked at Vanguard and the minimum changes with the issue. There were a few with minimum of one but not all.

Schwab shows all 12. Fidelity also I think. (Not as easy to count as Schwab.)
There are 50 TIPS outstanding, not 12.

Kevin
Duh. I was looking at T-Bills.

I don't do TIPS. (Real estate investments do good with high inflation. :happy )
by Doc
Thu Dec 15, 2022 11:57 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

asif408 wrote: Thu Dec 15, 2022 10:27 am I'll have to check the Vanguard account periodically to see if the minimum quantities change.
I just checked at Vanguard and the minimum changes with the issue. There were a few with minimum of one but not all.

Schwab shows all 12. Fidelity also I think. (Not as easy to count as Schwab.)
by Doc
Fri Dec 09, 2022 7:41 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Elmo wrote: Thu Dec 08, 2022 3:30 pm
Doc wrote: Thu Dec 08, 2022 3:21 pm
MattB wrote: Thu Dec 08, 2022 3:12 pm Depends where you are investing.
Or 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".
I am at Fidelity - forgot to say that.
How would calling the trading desk help? Can you explain please?
Because the rep at a trading desk told me so. He could place the trade manually.

Not FIDO.
by Doc
Thu Dec 08, 2022 3:21 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

MattB wrote: Thu Dec 08, 2022 3:12 pm Depends where you are investing.
Or 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".
by Doc
Mon Dec 05, 2022 7:27 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

That makes no sense, since the reopenings are for the same security that was most recently issued as a 10-year:
I think they roll on the NEW issue date. Every 3 months.
by Doc
Sat Dec 03, 2022 1:51 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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
Kevin, I'm confused.

Doesn't this approach give you an average maturity of a little less than five years?

By rolling a ten every three months the "price" of your protfolio remains fairly constant.
by Doc
Sat Dec 03, 2022 10:58 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Ten year Treasury ETF with ONE position!!!!

"UTEN is a "single-bond ETF," a new and highly innovative product. At any given time, the ETF holds a single bond issue consisting of the current on-the-run U.S. 10-year Treasury note. When the next Treasury is issued, UTEN will automatically roll its holdings. "

https://www.trackinsight.com/en/etf-new ... ember-2022

(Link has other bond ETFs in discussion.)

See also https://www.trackinsight.com/en/fund/UTEN

Good/Bad/Indifferent/Wait and See????
by Doc
Fri Nov 25, 2022 1:46 pm
Forum: Investing - Theory, News & General
Topic: What's your International play and why?
Replies: 77
Views: 7242

Re: What's your International play and why?

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
I also like international small cap but for another reason.

Large cap international funds are dominated by companies that deal world wide just like large US funds so you are not getting a whole lot of diversification except for the dollar/euro trade which is often "corrected" away by currency hedging (assuming you are buying funds is US markets).

Same idea as Random Walker's but on the currency side of the issue.
by Doc
Wed Nov 23, 2022 10:07 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

acegolfer wrote: Wed Nov 23, 2022 8:16 am Q on auto rolling 4-wk T-bill. Is there any gap between maturity and new purchase? Or, maturity and new purchase date are the same?
No gap if you are placing the buy yourself.

If you are using an auto roll the gap could be zero, one week, or forever depending on your brokerage.
by Doc
Mon Nov 21, 2022 1:00 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Kevin M wrote: Mon Nov 21, 2022 12:57 pm Right, but someone might not be happy with the incremental yield from 6 months to one year.
Agreed. I am using 26 week for now. But certainly not 8 weeks.
by Doc
Mon Nov 21, 2022 12:44 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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.
The highest T-bill rates were 26 or 52 weeks at the latest auction(s):

https://www.treasurydirect.gov/auctions/upcoming/
See Auction results column.
by Doc
Sun Nov 20, 2022 3:22 pm
Forum: Investing - Theory, News & General
Topic: Cash in Schwab account - How to earn best interest rate?
Replies: 44
Views: 9117

Re: Cash in Schwab account - How to earn best interest rate?

Regarding 26 week T-Bills when the cash is needed in 6 to 12 months.

Better to buy a 52 week bill now for the higher yield. If you buy your house in 6 months just sell the T-Bill. You will probably get the same income as if you had bought a 26 week bill at the start.

On the other side of the coin if you buy a 26 week bill now and do not buy your house in 26 weeks what do you do? Buy another 26 week bill? Then what if DW finds the greatest house 13 weeks after that? You now have to sell the 26 week early.

Just buy the 52 week bill now and "for get about it".
by Doc
Mon Nov 14, 2022 11:00 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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
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.
by Doc
Sat Nov 12, 2022 9:47 am
Forum: Investing - Theory, News & General
Topic: Is tilting ever a good idea?
Replies: 166
Views: 13843

Re: Is tilting ever a good idea?

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
Been there, done that, still do it.

Larry's the smartest investment advisor in my neighborhood. :D
by Doc
Thu Nov 03, 2022 12:37 pm
Forum: Investing - Theory, News & General
Topic: When would the latest rate hike reflect in T bills?
Replies: 17
Views: 2048

Re: When would the latest rate hike reflect in T bills?

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.
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.
by Doc
Tue Nov 01, 2022 4:42 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I bought the 26 week bill and only got 4.605% using Kevin's source.

Oh darn, maybe we will not have another rate increase in the 2nd half of the year. :)
by Doc
Sat Oct 29, 2022 3:49 pm
Forum: Investing - Theory, News & General
Topic: Quicken vs excel vs others to manually tag or create custom "buckets"
Replies: 1
Views: 479

Re: Quicken vs excel vs others to manually tag or create custom "buckets"

In Quicken:

Tools:
Security List: (chose the one you want)
Edit:
Other Info:
Edit Goals: (you get an "investing Goals List" which you can add or edit)
Pick or add your "goal".

You can now use the "Goal" to create reports etc.

Just use the Group by: to create custom reports.

FWIW my Investing Goals are: Cash, Core, Credit, Domestic Equity, Foreign Equity, Nmn'l Treasury, Cash
by Doc
Tue Oct 25, 2022 12:32 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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? Been there. Did that. Still doing it. One addional "maybe better" is to have those T-Bills mature the same week as the 52 week auction to give yourself more choices in the future as the yield curve changes. That's fine if you restrict yourself to buying at auction, but you have over 580 nominal Treasuries to choose from at any time on the secondary market, so there are always plenty of choices if you're OK with th...
by Doc
Tue Oct 25, 2022 10:22 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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?
Been there. Did that. Still doing it.

One addional "maybe better" is to have those T-Bills mature the same week as the 52 week auction to give yourself more choices in the future as the yield curve changes.
by Doc
Sat Oct 22, 2022 10:52 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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.
So if interest rates drop and you sell your T-Bill before maturity it is interest not cap gains. Hmmnn.
by Doc
Sat Oct 22, 2022 10:14 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Q1: Tax treatment on maturing T-Bills

When you buy a T-Bill at auction you pay somewhat less than face - say $980.

When that bill matures you get $1000 and have to pay tax on the $20 of accrued interest.

Question: How is the $980 treated? Is it a return of capital or a "sale" with zero capital gains? If a return of capital what happens to the shares?

(Q2 & Q3: may concern buying or selling on secondary market at some future date, maybe.)
by Doc
Mon Oct 17, 2022 4:37 pm
Forum: Investing - Theory, News & General
Topic: Short-term TIPS at negative yields vs. rolling 4-week Tbills
Replies: 21
Views: 3139

Re: Short-term TIPS at negative yields vs. rolling 4-week Tbills

Kevin M wrote: Mon Oct 17, 2022 4:04 pm It's not the topic of the thread, but my short answer is that I am putting new cash into short-term nominal investments in taxable and into TIPS in IRAs. My intention is to put about 50% of new cash in each, but that depends on which CDs mature when.
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.
by Doc
Mon Oct 17, 2022 1:41 pm
Forum: Investing - Theory, News & General
Topic: Short-term TIPS at negative yields vs. rolling 4-week Tbills
Replies: 21
Views: 3139

Re: Short-term TIPS at negative yields vs. rolling 4-week Tbills

I don't understand this at all. My analyses here are about which was a better way to invest while "waiting for higher real yields" in the high unexpected inflation and increasing real yield environment we've experienced, as I explained in the OP. I have simply shown that investing in a 2-year TIPS at the beginning of 2021 had a higher return than investing in 1-month (or at your request, 6-month) Treasuries. Period. I am not predicting anything. I missed the "was" and put "is" in its place. My suggestion was that a 24 to 52 week time frame might be better currently and was asking for your analysis. Putting a lot of weight into T-Bills in this environment makes sense. Using only 4 and 8 week bills seems like ov...
by Doc
Mon Oct 17, 2022 10:52 am
Forum: Investing - Theory, News & General
Topic: Short-term TIPS at negative yields vs. rolling 4-week Tbills
Replies: 21
Views: 3139

Re: Short-term TIPS at negative yields vs. rolling 4-week Tbills

I also did a calculation of rolling 4-week Tbills since I made these purchases, and the return was less than 1%, so significantly better than the 2-year nominal Treasury, but significantly worse than the 2-year TIPS. 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. The yield curve is basically flat from 26 weeks to ~4 years. Rolling the short end gives you almost the same inflation protection as a 2 year TIPS. I already answered the first question, but happy to run it for other maturities. Here are the results for rolling 6-month CMT yields, which will be very close to 26-week Tbills. ... Kevin I don't know if I disagree with you model or just don't understand it. Fix...
by Doc
Sun Oct 16, 2022 4:10 pm
Forum: Investing - Theory, News & General
Topic: Short-term TIPS at negative yields vs. rolling 4-week Tbills
Replies: 21
Views: 3139

Re: Short-term TIPS at negative yields vs. rolling 4-week Tbills

Kevin M wrote: Sat Oct 15, 2022 4:51 pm I also did a calculation of rolling 4-week Tbills since I made these purchases, and the return was less than 1%, so significantly better than the 2-year nominal Treasury, but significantly worse than the 2-year TIPS.
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.

The yield curve is basically flat from 26 weeks to ~4 years. Rolling the short end gives you almost the same inflation protection as a 2 year TIPS.
by Doc
Thu Oct 06, 2022 11:40 am
Forum: Personal Investments
Topic: Tax free conversion of Vanguard Mutual Fund to ETF - how to do it?
Replies: 46
Views: 12026

Re: Tax free conversion of Vanguard Mutual Fund to ETF - how to do it?

simas wrote: Thu Oct 06, 2022 8:39 am Thank you, will do - right now trying to figure out where to consolidate (since I am pretty sure I want an option of locale office at this point and cash management tie in which leaves me with Fidelity/Schwab as primary options)
We chose Schwab because their office was 3 miles closer then Fido.
by Doc
Mon Sep 26, 2022 6:51 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

From memory (and I am not going to check),

I believe that if you are using Quicken to record your financial data that there is an "accrued interest" entry available on the buy bonds transaction. Problem solved.

Quicken tax data is consistent with 1099s.

Since I download 1099's directly to TurboTax from the brokers it matters not.
by Doc
Wed Sep 21, 2022 12:41 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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
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.
by Doc
Wed Sep 21, 2022 12:31 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

billyt wrote: Wed Sep 21, 2022 10:44 am Doc, I must be misunderstanding what you are saying. Where is the price variation in a money fund that is fixed at $1 per share?
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.

The other thing is the bookkeeping hassle.

What you gain is a bit more return. And the ability to tax gain/loss harvest if that makes sense in your case.
by Doc
Wed Sep 21, 2022 10:23 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Rolling T-bills will indeed give you a higher return than a money market fund. However, consider that a rolling bond ladder is nothing more than a do it yourself bond fund . An equivalent fund might be more convenient. A rolling ladder buys 52 wk T-bills and holds them to maturity. Average " duration" about 26 weeks . A Treasury money market find likely buys all new issue and holds them to maturity. Example Schwab" Investor Shares SNOXX| Ultra Shares SCOXX Schwab Treasury Obligations Money Fund": Weighted Average maturity: 1 5 days Weighted Average like: 31 days https://www.schwabassetmanagement.com/resource/snoxx-scoxx-fact-sheet The "penalty" you get with the fund for the extra return with the longer duratio...
by Doc
Tue Sep 13, 2022 10:09 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

billyt wrote: Tue Sep 13, 2022 9:34 am Second straight month of slight deflation! Hope this doesn't continue.
Huh? Price of eggs, cars, clothing + many more all go down and all consumers benefit. The only ones that don't are the investors in TIPS. :D
by Doc
Mon Sep 12, 2022 3:51 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I get the impression we are nickeling and diming the differences in short term rates. The spread on last weeks auction was 32 basis points. Does this mean that the differences we have been talking about recently is just noise? Auction results for 26 week T-Bill last week TREASURY AUCTION RESULTS Term and Type of Security 182-Day Bill CUSIP Number 912796YK9 High Rate 1 3.320% Allotted at High 8.22% Price 98.321556 Investment Rate 2 3.424% Median Rate 3 3.300% Low Rate 4 3.000% Issue Date September 08, 2022 Maturity Date March 09, 2023 1) All tenders at lower rates were accepted in full. 2) Equivalent coupon-issue yield. 3) 50% of the amount of accepted competitive tenders was tendered at or below that rate. 4) 5% of the amount of accepted c...
by Doc
Sun Sep 11, 2022 12:02 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I get the impression we are nickeling and diming the differences in short term rates. The spread on last weeks auction was 32 basis points. Does this mean that the differences we have been talking about recently is just noise? Auction results for 26 week T-Bill last week TREASURY AUCTION RESULTS Term and Type of Security 182-Day Bill CUSIP Number 912796YK9 High Rate 1 3.320% Allotted at High 8.22% Price 98.321556 Investment Rate 2 3.424% Median Rate 3 3.300% Low Rate 4 3.000% Issue Date September 08, 2022 Maturity Date March 09, 2023 1) All tenders at lower rates were accepted in full. 2) Equivalent coupon-issue yield. 3) 50% of the amount of accepted competitive tenders was tendered at or below that rate. 4) 5% of the amount of accepted co...
by Doc
Tue Sep 06, 2022 3:39 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

RubyTuesday wrote: Tue Sep 06, 2022 3:18 pm
Doc wrote: Tue Sep 06, 2022 2:40 pm
Part one of 4 week auto-roll tests complete.

Schwab ROTH and taxable: OK so far

Fidelity cash account: OK so far

Vanguard: Not available.

I'll find our around November 11 whether there is a one week delay in reinvestment roll-over.
If 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).
Duh. I had my mittens on and had to guess how many fingers I was counting.
by Doc
Tue Sep 06, 2022 2:40 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I read in a 2020 thread ( https://www.bogleheads.org/forum/viewtopic.php?t=304490 ) that Schwab's auto-rollover system does not purchase the new/replacement T-bill on the same day as maturity date of the prior/matured T-bill. According to that thread, your money sits uninvested for a week until the next auction and settlement. Can anyone confirm if that is still the case? For a Schwab client with a T-bill ladder, is it optimal to make your purchases manually to avoid an uninvested week for each rung's reinvestment? (I'm still building my 13-week T-Bills ladder and have not yet experienced the first auto-rollover.) Automatic rollovers Your CD and U.S. Treasury investments will continue to roll over at each maturity date until you choose to ...
by Doc
Sun Sep 04, 2022 4:43 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I will need a roof in a few years. 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. The last time we withdrew from the car fund was for a new roof . :sharebeer Yes, but when I look at BSV it's five year return is -4.93%. I'm thinking I'll need protected principal to pull it off right. If you are adding to your "pot" on a regular basis the increase in the size of that pot at the end is not the starting size times "whatever". If you are just going to leave your pot on the stove and come back in in "x" years you have a different story. Then the flame on the stov...
by Doc
Sun Sep 04, 2022 3:52 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

mikeyzito22 wrote: Sun Sep 04, 2022 3:37 pm I will need a roof in a few years.
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.

The last time we withdrew from the car fund was for a new roof. :sharebeer
by Doc
Sat Sep 03, 2022 2:39 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I read in a 2020 thread ( https://www.bogleheads.org/forum/viewtopic.php?t=304490 ) that Schwab's auto-rollover system does not purchase the new/replacement T-bill on the same day as maturity date of the prior/matured T-bill. According to that thread, your money sits uninvested for a week until the next auction and settlement. Can anyone confirm if that is still the case? For a Schwab client with a T-bill ladder, is it optimal to make your purchases manually to avoid an uninvested week for each rung's reinvestment? (I'm still building my 13-week T-Bills ladder and have not yet experienced the first auto-rollover.) Automatic rollovers Your CD and U.S. Treasury investments will continue to roll over at each maturity date until you choose to ...
by Doc
Sat Sep 03, 2022 1:07 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

I read in a 2020 thread ( https://www.bogleheads.org/forum/viewtopic.php?t=304490 ) that Schwab's auto-rollover system does not purchase the new/replacement T-bill on the same day as maturity date of the prior/matured T-bill. According to that thread, your money sits uninvested for a week until the next auction and settlement. Can anyone confirm if that is still the case? For a Schwab client with a T-bill ladder, is it optimal to make your purchases manually to avoid an uninvested week for each rung's reinvestment? (I'm still building my 13-week T-Bills ladder and have not yet experienced the first auto-rollover.) Automatic rollovers Your CD and U.S. Treasury investments will continue to roll over at each maturity date until you choose to ...
by Doc
Thu Sep 01, 2022 4:05 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Six month TIPS vs. 26 wk. T-Bills:

The professional bond traders know more than most of us Bogleheads.

How many dollars are we talking about?

Does it make any difference?

Will some of you math types put some dollars on on this question.

I belive that the professional bond traders know more than us. If TIPS were going to outperform over the next 6 months how can the Treasury be selling any 26 week T-bill's?
by Doc
Thu Sep 01, 2022 2:12 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

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.
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 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.
Same answer. I get the long term but not the short term.
by Doc
Thu Sep 01, 2022 1:27 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

If your portfolio income needs are zero or nearly zero, then a logical question is whether you actually need a fixed income allocation to begin with. But if you do, then I guess the best choice is to simply buy the longest duration bonds you can find. I'm sure the thread would benefit from an example of purchasing and pricing a 2052 Treasury bond. Just because we don't have a liability matching portfolio doesn't mean I may not "want" to buy something large sometime in the future like new Cadillac's for all our grandchildren. :D I also want to rebalance from time to time. If I had bought long T's a few years ago I would have been in a real jam when I rebalanced into equities on Tuesday. I'm currently mostly in T-bills and I don't ...
by Doc
Thu Sep 01, 2022 11:58 am
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

vineviz wrote: Thu Sep 01, 2022 10:32 am The beauty of simply building a TIPS portfolio that matches your expected future real consumption is that you no longer need to care what inflation does or what interest rates do.
My problem with these posts for the last week or so is what do I do if my expected future consumption is ZERO?

( Ok our consumption is not zero but 95% is covered by SS and pensions. What do I do for the Grandchildren?)

I'm currently buying T-Bills until the Fed "rests" for a while but I don't like it.

Anybody have some suggestions?
by Doc
Sun Aug 28, 2022 3:58 pm
Forum: Investing - Theory, News & General
Topic: How often should someone rebalance?
Replies: 59
Views: 8782

Re: How often should someone rebalance?

Regarding the 5% rebalancing bands.

A reasonable methods for rebalancing small positions is to use a 5%/25% band method. Large positions 5% of the total portfolio and small positions 25% of that position's portion.

If you do a little math the number works out to 5% of the total for positions greater than 20% of the total portfolio and 25% relative for position smaller than 20% of the total portfolio.

I use the 5% of equity/fixed income totals to tell me to look and than use the 25% relative for the small individual pieces - large cap, small cap, Treasuries, corporates whatever. But I don't try to be overly precise in the calculations.
by Doc
Sun Aug 28, 2022 3:35 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4186
Views: 466532

Re: Trading Treasuries (nominal and TIPS)

Doc wrote: ↑Sat Aug 27, 2022 2:24 pm Kevin M wrote: ↑Sat Aug 27, 2022 2:03 pm ... there are two yield premiums that work in opposite directions on BEI: unexpected inflation yield premium for nominals (increases BEI), and illiquidity yield premium for TIPS (decreases BEI). I would expect the illiquidity premium to be much smaller than the unexpected inflation premium for intermediate or long term securities instead of very short term securities. But I don't know if there is any data that could support either point of view. Why would you expect that? Long term inflation risk is likely greater than short term inflation risk because we have get a better idea of what may happen in the short term than the long term. On the other end I would thin...