T bills

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jnk715
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Joined: Sat Oct 15, 2011 3:24 pm

T bills

Post by jnk715 »

I have about 60k sitting in a taxable brokerage account. I have already maxed out my ibonds. Should I consider buying a 2 year treasury bill on vanguard since it's yielding over 4% right now or stick with Vanguard's money market account to DCA into the market? I have another 250k sitting in CDs averaging about 2.50%. I currently hold zero stocks in my taxable account.
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Nate79
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Re: T bills

Post by Nate79 »

jnk715 wrote: Thu Sep 22, 2022 12:22 pm I have about 60k sitting in a taxable brokerage account. I have already maxed out my ibonds. Should I consider buying a 2 year treasury bill on vanguard since it's yielding over 4% right now or stick with Vanguard's money market account to DCA into the market? I have another 250k sitting in CDs averaging about 2.50%. I currently hold zero stocks in my taxable account.
When would you need the money? Can you handle a loss in this money?
Topic Author
jnk715
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Joined: Sat Oct 15, 2011 3:24 pm

Re: T bills

Post by jnk715 »

jnk715 wrote: Thu Sep 22, 2022 12:22 pm I have about 60k sitting in a taxable brokerage account. I have already maxed out my ibonds. Should I consider buying a 2 year treasury bill on vanguard since it's yielding over 4% right now or stick with Vanguard's money market account to DCA into the market? I have another 250k sitting in CDs averaging about 2.50%. I currently hold zero stocks in my taxable account.
I have access to the 250k if I ever decide to buy a house. So I don't necessarily need this money anytime soon. I currently have 60k in a Roth IRA and 190k in a Traditional TSP. I'm 40.
dbr
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Re: T bills

Post by dbr »

You would be better off with a long term plan rather than short term maneuvering of interest rates.

The starting point is your objectives. Then you need an investment plan for what to save and what asset allocation to have. You will want to consider the most tax efficient accounts to hold different assets. Finally you can choose what funds, etc. to select.
lws
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Re: T bills

Post by lws »

Find a goal for the money.
Deploy the money accordingly.
MikeG62
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Re: T bills

Post by MikeG62 »

jnk715 wrote: Thu Sep 22, 2022 12:22 pm I have about 60k sitting in a taxable brokerage account. I have already maxed out my ibonds. Should I consider buying a 2 year treasury bill on vanguard since it's yielding over 4% right now or stick with Vanguard's money market account to DCA into the market? I have another 250k sitting in CDs averaging about 2.50%. I currently hold zero stocks in my taxable account.
Yes, I think you should consider buying Treasuries. Yields are tremendous. Having said that, it depends on how soon you might need the funds (although the Treasury market is so liquid you could easily liquidate the bills if needed).

Setting that aside, I would be looking hard at breaking the $250,000 in CD's and getting those funds into Treasuries. But a few questions first:

1. How many CD's are involved?

2. When do they mature?

3. What is the EWP for each?

I have broken CD's and moved those funds into Treasuries. It can make a lot of sense even if there is an EWP involved. Yield spread between Treasuries and those CD's is currently quite large/attractive.
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hudson
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Re: T bills

Post by hudson »

jnk715 wrote: Thu Sep 22, 2022 12:28 pm
jnk715 wrote: Thu Sep 22, 2022 12:22 pm I have about 60k sitting in a taxable brokerage account. I have already maxed out my ibonds. Should I consider buying a 2 year treasury bill on vanguard since it's yielding over 4% right now or stick with Vanguard's money market account to DCA into the market? I have another 250k sitting in CDs averaging about 2.50%. I currently hold zero stocks in my taxable account.
I have access to the 250k if I ever decide to buy a house. So I don't necessarily need this money anytime soon. I currently have 60k in a Roth IRA and 190k in a Traditional TSP. I'm 40.
60K to invest...no short term needs?
If that was my situation today, I would buy 50% nominal treasuries and 50% TIPS...probably 10 year maturities.
Rudedog
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Re: T bills

Post by Rudedog »

In any case, that 4% is very attractive.
stocknoob4111
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Re: T bills

Post by stocknoob4111 »

I am buying 3 month now yielding 3.1% thought this was a sweet spot between duration and yield at least until rate hiking cycle peaks
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goodenyou
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Re: T bills

Post by goodenyou »

I bought 3 and 6 month T-bills today. It is for a house build over the next 1-2 years. I will need liquidity for the construction draws.
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