Bogleheads.org

The Fed is officially still in the quantitative tightening regime now, not buying in the open market.


With thatvsaid , they are adding massive amounts to their balance sheet by taking deposits at the discount window to support bank solvency.

The Fed doesn't issue Tbills, the U.S. Treasury does that.

This is also a small sign that rates may have reached their current zenith.

Hogan773 wrote: ↑Fri Mar 24, 2023 10:29 am yes the steepness is crazy, which makes it feel like I need to be paying attention!

I am doing the switch again to VMSXX today. I guess from there I will decide if I try to keep watching it or not. Do you think the "sine waves" are predictable enough that I can sort of forecast ahead that I should expect to keep an eye out for the next transition crossover in [X] days or weeks from now?

They are predictable overall, but the frequency is increasing. I don't know if this one will last 28 days like last time. I have a feeling it may be even shorter.

I may give up on this watching/swapping thing haha. I hadn't looked in a couple days and now the VMSXX 7 day yield is shooting up again, so right now it is better than VUSXX tax adjusted. I guess given the reporting lag of the 7-day yield, that means I probably am late again in switching over. So while I haven't thought through this perfectly, my gut is that any benefit here really requires one to pretty much perfectly catch the right crossover points. If one doesn't, but gets "close" then the benefit will be lower and may be just the same as doing nothing, so lots of work for nothing. WORST case if one is too sloppy and really misses the crossover points with a lag, then one may actually be doing worse than just leaving it in VM...

DrivingFun wrote: ↑Fri Mar 24, 2023 8:27 am Can someone explain to me like I'm 5 why national municipal money market is tax free at the federal level, but taxable at the state level (less the proportionate part that was issued in state of residence). However treasury money market is taxable at the federal level but tax free at the state level? Aren't both issues by the government?

It is the law. That is why. There are constitutional reasons, but really it just the specifics of state and federal tax laws. Note, every state has unique laws on both muni and treasury income.

What is your bank that is taking 20 days? Did they do micro-deposits or some other validation scheme? Do you need enter the micro-deposit amounts? Also, regarding holds, generally there is always a 7 day delay on transferring out funds that were just ACH'd in. That is a fraud limitation. That will never go away but there may be additional delays restrictions for new accounts. I just did my annual back door Roth conversion at Fidelity and my wife and I get treated completely differently regarding wait times. go figure. Discover. Already did the micro deposits on the 2nd of march. It just doesn't allow me to add more bank accounts yet. Another question, would cash invested in VUSXX show up as part of the "Funds available to withdraw&quo...

I bought the last 3 TVs at Walmart (43", 50", 55"), it worked perfectly fine. I do stuff myself. I am also very price sensitive.

The worst that can happen is really just a delay in redemptions if the fund seized up for some reason, and VUSXX is actually designed to minimize that risk about as completely as any US mutual fund of any kind, money markets included.

If you are really concerned, keeping a small amount in a different brokerage in a different money market fund would further reduce the risk. I personally don't do that beyond keeping about 2 weeks funds in a HYSA at my credit union. The rest of my cash is in mostly VUSXX and some T-bills.

anon_investor wrote: ↑Wed Mar 22, 2023 8:16 pm Merrill Edge may not let you transfer these institutional share class funds due to contractual limitations. Someone on BHs bought FSIXX, a Fidelity institutional share class money market fund (normally a $1 milllion minimum at Fidelity), at Merrill Edge (only $1k minimum there) and tried to transfer it to Fidelity, and Merrill Edge would not let them.

Seems fair. I am sure Merrill is paying Fidelity a fee to put the fund on their available list to provide a competitive fund in arguably one of the most important categories. They are likely doing all the book-keeping for their retail accounts too.

What is your bank that is taking 20 days? Did they do micro-deposits or some other validation scheme? Do you need enter the micro-deposit amounts?

Also, regarding holds, generally there is always a 7 day delay on transferring out funds that were just ACH'd in. That is a fraud limitation. That will never go away but there may be additional delays restrictions for new accounts.

I just did my annual back door Roth conversion at Fidelity and my wife and I get treated completely differently regarding wait times. go figure.

jeffyscott wrote: ↑Wed Mar 22, 2023 9:01 am Took a while to figure it out, but got there eventually. They show 0 going all the way back to March 2011 and it remains at 0 until Jan 2022:

Yes, since this is the monthly EDGAR snapshot, that is consistent with other data. What is known from Annual USGO % reporting for taxes, there was some Repo activity in previous years but at a much lower level than 24%. 2019 saw a USGO % of 98% and 2020 saw it at only 94%. I can be implied that those less than 100% values came from Federal Reserve bank of NY Repos since they are the only allowed alternative.

jeffyscott wrote: ↑Wed Mar 22, 2023 7:53 am It appears this is something new for VUSXX, since last year it reported 100% of income was from US government obligations.

I just found a great data tool for MMF Repo statistics. From the Office of Financial Research: https://www.financialresearch.gov/money ... l-reserve/

this can drill down and show participation levels in the various Repo markets to various levels of detail.

It is clear from looking at Vanguard Fund level data on the US Treasury Repo market that VUSXX only started in this market in a significant way in the past 90 days.

BTW, this data appears to be an aggregation of the monthly fund reports to EDGAR.

As mentioned there is some state tax advantages to VUSXX over the two mentioned by the OP. What are the differences between VMRXX and VMFXX? The biggest one is that Federal (VMFXX) is used as the settlement fund for Vanguard Brokerages. It also allows check-writing privileges (VMRXX does not). Other than that, there is a small difference in amount of non-USGO assets that VMRXX is allowed to buy, other than that they are the same. I believe the ER difference is driven by the check writing and settlement differences. In practice for the past 6 mos., the two funds have been run almost identically from an investment perspective. That is in part driven by the fact that straight US Treasuries have seen the best yield recently, so everyone goes th...

burritoLover wrote: ↑Tue Mar 21, 2023 2:24 pm There's no non-dividend fund so it would have to be either individual non-dividend paying stocks (yikes) or a fund that has characteristics that tend to include low or no dividend paying stocks (such as growth). But the most diversified way to do that would be to have a value fund (which includes non-dividend payers) in tax-advantaged and a growth fund in taxable. If they have the same index provider, there shouldn't be any overlap between them (generally).

VUG/VTV split works extremely well. Combine with VB and you have a total stock market coverage.

TomatoTomahto wrote: ↑Mon Mar 20, 2023 6:06 am

OverseasBH wrote: ↑Mon Mar 20, 2023 5:56 am Is there a scenario where a dividend focused strategy is rational?

IF I were the beneficiary of a trust where I could spend the income but not touch the principal, I'd probably want the principal in a dividend focused fund. I'm not, so I prefer not to receive dividends.

This is very true, there are real legitimate reasons for certain individuals in certain situations to legitimately prefer dividends for reasons unrelated to their relative return when compared to the overall market.

That does not make them better.

exodusing wrote: ↑Sat Mar 18, 2023 5:29 pm

indexfundfan wrote: ↑Sat Mar 18, 2023 5:18 pm I was holding VUSXX on Etrade and I swapped it to GABXX, which potentially has no repos. It also has a very slightly lower ER.

and a longer average maturity, 32 v 46 days.

About half due to VUSXX holding the Repos I would bet. Most of the other Treasury Only are running around 37-39 days.

My tool is configurable for time frame

what do y'all think about moving from VUSXX to the vgd short term treasury index fund? VGSH is a fine fund, I own a small amount, but it is NOT by any measure comparable to VUSXX. It has a duration of approx. 2 years, it has much more price volatility. Only appropriate if you want to own longer term bonds. I a portion of my fixed income in VGSH and VTIP as part of a barbell approach with much longer term funds. VUSXX, is really for stuff I plan on spending in the next 6 mos. thanks. makes sense. i guess i was thinking of moving half of my vusxx over to vgsh or the admiral version. i really hate paying state taxes on what is supposed to be a treasury fund cheers grok Other options are an auto-roll of 3 or 6 T-bills or SGOV 6 mos. ETF. SGOV ...

What is the size of your company? If you have a group of affected individuals large enough to be worth reaching out to a Labor/ERISA lawyer to see if they can push back on company. Only you can decide if that is worth the potential cost.

I would be interested in your source data, but I am also confused, what is a 1 month ladder? How many tranches do you have in the ladder? 4 tranches with one every week? Similar patterns for the other ones? My laddering scheme showed 4 week ladders (4 steps equally entered into a ladder one every 1/4 every week on a delayed basis into 4 week T-Bills) beating all other durations for investors at a 6.37% state income tax rate. The benefit was pretty minor though 4week ladders beat VUSXX by 4bp, an 8 week by 2bp and 13 weeks losing by 5 to 8 bp depending on how many steps I used. I used data from this site. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_va...

1 Month T-Bill Ladder - Return averaged 9 basis points higher than VUSXX 2 Month T-Bill Ladder - Return averaged 14 basis points higher than VUSXX 3 Month T-Bill Ladder - Return averaged 12 basis points higher than VUSXX 6 Month T-Bill Ladder - Return averaged 7 basis points lower than VUSXX I would be interested in your source data, but I am also confused, what is a 1 month ladder? How many tranches do you have in the ladder? 4 tranches with one every week? Similar patterns for the other ones? My laddering scheme showed 4 week ladders (4 steps equally entered into a ladder one every 1/4 every week on a delayed basis into 4 week T-Bills) beating all other durations for investors at a 6.37% state income tax rate. The benefit was pretty mino...

scoothome wrote: ↑Sat Mar 18, 2023 11:15 am @retiringwhen

You've created such a cool tool in MM Optimizer. I suggest you start a master thread for it, similar to what Ben Mathew did for TPAW viewtopic.php?t=331368, longinvest did for VPW viewtopic.php?t=120430, BigFoot48 did for RPM viewtopic.php?t=97352, etc.

That way you can announce version updates, users can report bugs and request features, etc. Or maybe you have already started such a thread and I missed it?

I have a version 6 brewing with some thoughts on T-Bill ladders and auto-rolls. Once that settles down, I will start a dedicated thread when I announce that version. Thanks!

..."Requests for Full Withdrawals Withdrawals from the Voya Fixed Plus Account III fund are allowed to pay benefits to participants at any time. However, if the plan, as the Contract Holder, requests a full withdrawal of all participant accounts held in the Voya Fixed Plus Account III, VRIAC will pay amounts in the Voya Fixed Plus Account III, with interest, in five annual payments that will be equal to: ... The individual plan participants have no control over the decision of their employer to change plan providers. Since it was the action of the employer (to change plan providers) that has restricted access by the employees to their funds the employer has effectively barred employees from effectively managing some of their investmen...

grok87 wrote: ↑Sat Mar 18, 2023 8:55 am what do y'all think about moving from VUSXX to the vgd short term treasury index fund?

VGSH is a fine fund, I own a small amount, but it is NOT by any measure comparable to VUSXX. It has a duration of approx. 2 years, it has much more price volatility. Only appropriate if you want to own longer term bonds. I a portion of my fixed income in VGSH and VTIP as part of a barbell approach with much longer term funds.

VUSXX, is really for stuff I plan on spending in the next 6 mos.

So if I wanted to try to swap, what is the most effective way to watch and anticipate the swap points? Should I follow the Sifma index and use that as a predictor because VMSXX SEC yield as reported on Vanguard ultimately follows it with a lag? So when the SIFMA index is heading upward and equals the tax adjusted yield on VUSXX for example then swap out of VUSXX and into VMSXX and vice versa? Other folks have been trying to figure that out, but I think watching the weekly on Wednesday update of the SIFMA index is probably the best approach IF you are willing to do the homework to setup the necessary calculations. The problem is how do you calculate after tax rates for the SIFMA rate mapped to your actual fund (remember expense ratios will ...

@RETIRINGWHEN Wow what a cool spreadsheet! Thanks So I took a look and in Illinois and assuming your "Tranche 2" scenario of just flipping between VMSXX and VUSXX it takes 11 swaps (presumably well-timed) and on $100K that yields extra $132. Or if we are talking about $500K then $660, or a million dollars then $1320, and so forth. If we had to pick one or the other though is it the case that VMSXX itself will do better or will VUSXX. I need to go open up your sheet again to see Yes. you get the idea. Make sure you have both state and Federal rates correct. But if you are a high federal rate taxpayer in IL, then yes, the VMSXX will probably be the best deal. IL has relatively low flat rate, so the muni funds will work best for mos...

This thread and the fund restrictions are an example of the fact that there is no free lunch with fixed income. Most people don’t realize the constraints that must be placed upon SV funds to allow them to keep a stable $1 price AND return competitive returns. I agree, better disclosure is key and one thing I have learned is that DOL managed retirement plans such as 401Ks seem to have much more opaque disclosure, even at Vanguard. It seems like a bad combination. After reading what I could find about my plan’s SV and asking questions of the administrator, I have stopped using them for any significant Fixed Income. They are just not worth it. OTOH, The SEC has worked major regulatory changes on Money Market funds to make the risk trade-offs m...

rocketsrule wrote: ↑Tue Mar 14, 2023 4:56 pm I have a lot of money invested through fidelity. I also have money in Spaxx and Fzdxx. Could you explain to me why? Fzdxx could be risky?

Here is a nice article Fidelity published this week about cash holding including their various MM funds. I think it makes it pretty clear what trade-offs exist between the different funds.

Ways to help keep your cash safe

No date matters, dividends accrue daily and are paid monthly on money market funds. If you sell in the middle of the month you will get a dividend paid out for this accrued amount eventually, either the day after selling everything or at the end of the month with the rest of the monthly dividend payment.

The only impact is when, not how much. Some folks get a bit OCD about the pennies laying around sometimes, but it is just an artifact of how the funds work. The process I described is pretty much true for any money market at Vanguard (settlement or not) and the process is similar at other brokerages too.

As per the M* articles, the Chinese economy did well, its stock returns (for investors) did not. This isn't uncommon. In the period of 2000-2009, US earnings growth was similar to 2010-2020. Stock market returns, however, were not. The former period returned less than bonds, the latter compounded at 15% annualized. It is important to understand there were very different underlying causes. Many EM countries with China being a primary example saw poor investor returns primarily due to massive dilution of shares. Essentially, they kept issuing more and more equity effectively diluting the ownership shares of earlier investors thus their share of profits. The US poor returns were almost completely driven by a lowering P/E multiples driven by i...

bikechuck wrote: ↑Wed Mar 15, 2023 12:04 pm Meanwhile Outer Banks houses are being washed into the ocean. Friends of mine in the Fla. Keys have incurred tens of thousands of dollars of special assessments for hurricane damages. It is getting expensive to purchase home owners insurance in costal areas of Florida if you can find it.

People who build houses on sand bars shouldn't be allowed to buy insurance. The house WILL disappear. It is just a question of when.

People used to understand this and beach housing was appropriately disposable including tents.

edited - quoted fixed to reference to correct attirbution.

The most important take-away is compare like funds to like funds. There are really only 5 types of money market funds. I suggest you choose the risk/return and tax-treatment characteristics first. Chose the class of fund you want to hold, then chose the specific fund based upon ER, return, minimum investment and availability at your brokerage(s). Prime MM - Commercial paper mostly - usually nearly 100% taxable. Gov't Cash Reserves MM - US Gov't backed securities, Repos and some Federal Agency Money - some state tax exemption. Government/Federal MM - US Gov't backed securities, Repos and some Federal Agency Money but usually a bit more conservative and shorter duration - some state tax exemption. Treasury MM and Treasury Only MM - US Treasur...

I have a lot of money invested through fidelity. I also have money in Spaxx and Fzdxx. Could you explain to me why? Fzdxx could be risky? I'm also not sure if I understand the breakdown of it's underlying assets It is not a high risk fund, but it is a classic "Prime" money market that invests in yankee paper, Certificates of Deposit and commercial Repos. Those are generally considered more risky than US Gov't back securities like those held in a fund like VMRXX or a FDRXX which are similar. Basically, due to the higher ER on Fidelity MM funds, to get a competitive yield with a Vanguard fund, they need to take more risk. That is the reality. I am not telling you that Prime MM funds will fold or even break the buck, but the chances...

I am trying to decide which fund to use as my cash account (not core account). The Fidelity FZDXX has an expense ratio of 0.3% versus Vanguard's VMRXX which has an expense of 0.1%. There is a Fidelity $75 transaction fee to make any purchases with Vanguard. It appears that each fund holdings are about the same. Yesterday's (3/13/23) 7-day yield for FZDXX was 4.46% while VMRXX's 7-day yield was 4.53%. I would appreciate any thoughts from the Bogleheads community. Which one would you use and why? Thanks. If you are going to hold the money at Fidelity, hold it in their fund. If at Vanguard, hold the Vanguard fund. Really as simple as that. It almost never pays to pay those transaction fees, especially for a money market fund. You may have bet...

indexfundfan wrote: ↑Mon Mar 13, 2023 7:54 pm Another correction: the ER of UTIXX is 0.2% (Summary prospectus 6/30/2022).

The two funds (GABXX and VUSXX) with the lowest expense ratios (0.08% & 0.09%) are neck-to-neck in their yields, and performance.

Fixed in the live copy. ER matters, probably most.

That said, have you ever noticed that he consistently claims that "all retirees liquidate their stocks AND bonds and go 100% into T-bills and cash upon retiring"? He proceeds to purport that this phenomenon will be the root cause of a demographically driven capital shortage for the next ~20 years, as the boomers all move out of equities and FI and into cash or cash equivalents. As this is the one topic I've heard him opine on where I actually have some independent expertise, I am always struck by how reductionist and inaccurate his claim is. Average retiree portfolios do become more conservative over time, but it is nothing close to the "cliff" he describes in this oft-cited statistic. His overconfident assertion in thi...

Revised.

You are right. Actually it shows 4.49% for yesterday. I will update in my worksheet.

Here is the link to my worksheet if folks what to review. It is in a tab of MM Optimize v5

Here are the after tax rates for the Treasury MM funds mentioned above.

the Fidelity FSIXX is the clear winner if you have access. The Gabelli fund is an oddball with high duration/life vs. the rest, but is also very good rates though.

Otherwise Vanguard is still very good after tax rates even at the very highest state tax rates. It only gets more attractive as rate drop. Ironically, most folks in the 10+% state tax rate are better off with Munis.

GABXX might be a possibility. It's available at Etrade with a minimum of $10k purchase. It's ER is 1 basis point lower than VUSXX and it seems to be holding treasuries only. Nice yield, excellent ER. I can't find any documentation of their actual holding after 12/31/2022. If compared to to VUSXX, they are the same on the same date. Also, anyone know where to find their report on % USGO for tax year 2022? Note, this funds' prospectus is explicit that they will invest in Repos. I am applying the same rules to all the funds. I need the following information: - current SEC Yield (last 7 days) - holdings as of the end of the most recent month. This fund only reports 12/31/2022 and not JAN or FEB yet. - Reported USGO % for last tax year (2022). ...

Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year! Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity. It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash". In a high tax state, VUSXX may not beat out some other treasury only money market funds ...

Why do so many people believe that VUSXX won't meet the CA/NY/CT 50% requirement? They are not even close to failing it for the first two months this year!

Even if VUSXX is only 75% Treasuries, after-tax it still beats the pants off just about every other Treasury fund out there due to its low ER. Besides, few if any of those funds are 100% every year. Last year many funds found themselves down to 95% including Fidelity.

It seems to me that Vanguard has been getting low risk extra yield in excess of the higher tax costs. Seems pretty goldilocks to me (in a good way!) I would rather be in rather short in my duration right now for ready "cash".

anon_investor wrote: ↑Sun Mar 12, 2023 4:31 pm

retiringwhen wrote: ↑Tue Mar 07, 2023 10:23 am sell VUSXX -> bank account
bank account -> buy VUSXX

Both work just fine once you have ACH setup for the bank. I do it regularly. Just make sure you are careful in the setup of the transaction to ensure you choose the correct target when selling and correct source when buying.

I don't think you can do this within the mobile app (fund purchases directly from your bank account). You can do this just fine on the desktop/mobile website.

Yup, you are right! I don't use the app, I am a slave to 27" monitors.

Haha, yes, I guess my philosphy is at this tax bracket, doing anything extra for 100$, or even upto a few hundred, it's really just not worth the time. Wonder if others in this bracket do feel the same. Also, last question, I understand that VUSXX is "safe" as they come given majority is in Treasury, but the Muni (VMSXX) is just 100% tax exempt securities, so that is just as "safe"? It's very interesting stuff though, because we're seeing VUSXX at ~4.5% versus VMSXX at ~2.2%, which is a pretty big diff in yield, but still interesting how VMSXX comes out on top... I'm going to read more about this to further educate just out of the interest, but thanks for giving me the straight answer. This community is quite helpful an...

sugobw wrote: ↑Sun Mar 12, 2023 1:46 pm When you say choosing the Muni at this rate, what exactly does that mean? Just keep VMSXX and be done with it?

yes.

I'm not ever going to do Swaps.

Good time management skills there!

Hi all, this MM Optimizer is confusing for me, and that's probably just because I am a bit dense... :) If it's 40% (37% but add the 3% on top for NIIT, not sure if that is correct either?) + 10.75% state, it seems like VUSXX is "~60$" worse than VMSXX? Am I reading this correctly? And that's a marginal difference and that's with maximizing swaps? So is it right to say that VMSXX is slightly better but barely. If I'm understanding this correctly, for me, personally, I don't want to swap and do all that extra work for very marginal gains, so sticking with VUSXX still ok? Thanks all Not sure exactly what you are reading, but for NJ tax rate of 10.75 and 40.8% tax bracket (Tranch A on the Optimizer Tab), if you just held VUSXX vs. ju...

livesoft wrote: ↑Sat Mar 11, 2023 4:12 pm In my county in Texas, a car title transfer is easily accomplished by making an appointment at the tax assessor office which is nearby. They really do honor the appointment time, so the last time I did it, I was present for less than a minute and then continued on to the grocery store. I don't know how NJ works, but maybe they have modernized and let one make appointments online, so there is no waiting?

Added: In our area, almost all DMV visits also require an appointment made online, so almost no waiting.

NJ does allow appointments, they also have some forms of walk-ins still, but that won't help the OP's situation, the problem is who, not when.

CAsage wrote: ↑Sat Mar 11, 2023 3:55 pm Thinking outside the box, can you make any changes to title via mail?

Not in NJ. All titling activities must be done in person at the MVC center, even car dealers. They have runners whose job it is go over to the MVC with a pile of titles once a week or so. I tried to get a car dealer friend to help me with the trailer I mentioned (it was 9 mos. late on titling due to the pandemic and unavailability of appointments) and that is how I learned the antiquated nature of the process.

First step is to upgrade the routers. If you are on an end of life equipment there is a risk of future cyber vulnerabilities. Routers are a favorite target.

Also, my experience is that the radios in the most Wi-Fi routers start to get flakey after 4-5 years. Many issues that people think are network related are at the root, bad radio function due to age. I would replace them.

I had this experience with Linksys and also Netgear equipment.