TBills: The best-performing asset of 2022?

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Kevin K
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TBills: The best-performing asset of 2022?

Post by Kevin K »

There's a good new post from David Enna at Tipswatch:

https://tipswatch.com/2022/09/21/short- ... ctive-now/

It's hard for me to see why the strategy of buying 13 and/or 26 week bills and rolling them over isn't not only the best place to put cash but quite possibly the best fixed-income investment altogether at present and until such time (as Enna suggests) that CD rates catch up to or surpass Treasuries.

While acknowledging that forecasting interest rates is generally a fool's errand, not believing that the Fed is going to do what it says it will and taking massive losses over a multi-year period on longer-duration fixed income investments on top of the equity market pain is also rather unappealing.
livesoft
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Re: TBills: The best-performing asset of 2022?

Post by livesoft »

Your title is misleading. For instance, our best performing asset class so far in 2022 is TIAA Real Estate Account which as of yesterday was up 11.55%.
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Hoongajji
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Re: TBills: The best-performing asset of 2022?

Post by Hoongajji »

Kevin,

The Bills are finally a better than zero percent place for money. Three years or more in the drought?

The longer duration bills have a duration risk. Six month duration risk? Take a look at the 8 week and 4 week yields.

You buy a 8 week at 2.6%.

Then two weeks later the 4 week bill is at 2.6%. Six weeks remain on that eight.

4 week is 2.72% today.

Fed speak has increased rates in the future.

I-Bond and a staggered perpetual four week bill play feel like a good fit.

Roll with the punches.
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whodidntante
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Re: TBills: The best-performing asset of 2022?

Post by whodidntante »

Not even close. Managed futures are up big. The first one I recalled from memory is up 49% YTD.
https://funds.aqr.com/funds/aqr-managed ... erformance
EZ James
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Re: TBills: The best-performing asset of 2022?

Post by EZ James »

I've had t-bill ladders in the past but this time Vanguard foiled me on rung 5 of my weekly buys. I can view them but when I log on to buy I get a blank page after I select the source account. Its been this way since Sep 17 for me.
Zanmar
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Re: TBills: The best-performing asset of 2022?

Post by Zanmar »

EZ James wrote: Thu Sep 22, 2022 11:23 pm I've had t-bill ladders in the past but this time Vanguard foiled me on rung 5 of my weekly buys. I can view them but when I log on to buy I get a blank page after I select the source account. Its been this way since Sep 17 for me.
Its working ok in our 2 brokerage accounts today. We did have the blank page the same time you did. I believe it was working again sometime Sunday night. Definitely on Monday.
skierincolorado
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Re: TBills: The best-performing asset of 2022?

Post by skierincolorado »

Kevin K wrote: Thu Sep 22, 2022 10:29 am There's a good new post from David Enna at Tipswatch:

https://tipswatch.com/2022/09/21/short- ... ctive-now/

It's hard for me to see why the strategy of buying 13 and/or 26 week bills and rolling them over isn't not only the best place to put cash but quite possibly the best fixed-income investment altogether at present and until such time (as Enna suggests) that CD rates catch up to or surpass Treasuries.

While acknowledging that forecasting interest rates is generally a fool's errand, not believing that the Fed is going to do what it says it will and taking massive losses over a multi-year period on longer-duration fixed income investments on top of the equity market pain is also rather unappealing.
If the fed does exactly what it says it will do, interest rates on longer duration bonds will stay the same. It's built into the market already. Longer durations lose money when the path of future fed policy changes to higher federal funds rates than the prior outlook.
Kuna_Papa_Wengi
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Re: TBills: The best-performing asset of 2022?

Post by Kuna_Papa_Wengi »

Why do I keep seeing mention of 4% t-bills when this page only shows 3.9% for the 26 week t-bill? https://www.treasurydirect.gov/instit/instit.htm

Where are people seeing > 4%?
toddthebod
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Re: TBills: The best-performing asset of 2022?

Post by toddthebod »

Kuna_Papa_Wengi wrote: Fri Sep 23, 2022 5:20 am Why do I keep seeing mention of 4% t-bills when this page only shows 3.9% for the 26 week t-bill? https://www.treasurydirect.gov/instit/instit.htm

Where are people seeing > 4%?
Secondary market:
https://www.bloomberg.com/markets/rates ... t-bonds/us
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jeffyscott
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Re: TBills: The best-performing asset of 2022?

Post by jeffyscott »

skierincolorado wrote: Fri Sep 23, 2022 12:49 am
Kevin K wrote: Thu Sep 22, 2022 10:29 am There's a good new post from David Enna at Tipswatch:

https://tipswatch.com/2022/09/21/short- ... ctive-now/

It's hard for me to see why the strategy of buying 13 and/or 26 week bills and rolling them over isn't not only the best place to put cash but quite possibly the best fixed-income investment altogether at present and until such time (as Enna suggests) that CD rates catch up to or surpass Treasuries.

While acknowledging that forecasting interest rates is generally a fool's errand, not believing that the Fed is going to do what it says it will and taking massive losses over a multi-year period on longer-duration fixed income investments on top of the equity market pain is also rather unappealing.
If the fed does exactly what it says it will do, interest rates on longer duration bonds will stay the same. It's built into the market already. Longer durations lose money when the path of future fed policy changes to higher federal funds rates than the prior outlook.
Yep and the opposite, longer durations gain when the path changes to lower fed funds rates than the prior outlook.

Believing that the Fed will do what it says, but that the market is not already doing the same may be the biggest "fools errand" of all.
And so it goes, And so it goes, And so it goes, And so it goes, But where it's goin' no one knows
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