Treasuries - Up or Down rest of 2024

[investing123]

Yeah, seriously huge question but I am looking for opinions.

I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now.

I'm thinking if the treasury return starts going down, sell and buy VUSXX.

Opinions?

Thanks,

Jerry

[jebmke]

My opinion is that small investors have no business trying to surf the yield curve. Even the high end bond traders get burned doing this and they sort of know what they're doing.

[sailaway]

Probably one of the two, but they could be flat.

[exodusing]

My impression is that expert predictions usually do worse than random chance.

[muffins14]

Yeah, seriously huge question but I am looking for opinions.

I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now.

I'm thinking if the treasury return starts going down, sell and buy VUSXX.

Opinions?

Thanks,

Jerry

What are you going to use the money for in 11-12 months? Is it a specific bill like property taxes, a down payment, or medical bill? How exact do you need the amount to be in 11-12 months? What would happen if you were off by 1-5%?

[Call_Me_Op]

Opinions?

Draft an Investing Policy Statement (IPS) and follow its guidance.

[rockstar]

Is this for your emergency fund?

I have no clue where rates will be 12 months from now. And 6 is even a tougher question. And I do have t bills maturing both this month and next.

[hudson]

Yeah, seriously huge question but I am looking for opinions.

I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now.

I'm thinking if the treasury return starts going down, sell and buy VUSXX.

Opinions?

Thanks,

Jerry

I'm trying to figure that out myself. It's an ongoing challenge.
I like to kind of match durations of the fixed income with when I'll likely need to spend the money.
I'm terrible at predicting rates.
For the money that I want to invest in a few days, I'm thinking half nominal ten year treasuries and half ten year TIPS.
I think that the 10 year nominals are paying around 4%. The 10 year TIPS are paying around 1.75%. I'm also thinking that 10 years is too long for nominals, but 4% for 10 years might just work. (or not)
I'll decide on Mar. 13.
Bill Bernstein says that short nominals and long TIPS are almost riskless. https://www.advisorperspectives.com/art ... at-age-104


Bottom Line: I like hedging my bets by buying some short nominals, some intermediate nominals, and some long TIPS.
CDs works too.

[investing123]

jebmke: "My opinion is that small investors have no business trying to surf the yield curve. Even the high end bond traders get burned doing this and they sort of know what they're doing."

Great advice. I got 2 mil to invest but I take your point to heart re chasing the yield curve. Thanks.

sailaway - Thank you alot.

exodusing - Thank you too.

muffins14 - "What are you going to use the money for in 11-12 months? Is it a specific bill like property taxes, a down payment, or medical bill? How exact do you need the amount to be in 11-12 months? What would happen if you were off by 1-5%?"

I don't need the money for any of those reasons and anot for an emergency fund. I just want to grow my assets for the future. If I were off by 1 - 5% there would be no negative consequences except for the disappointment at not having maximized my investment.

Thank you all.



Jerry

[jebmke]

jebmke: "My opinion is that small investors have no business trying to surf the yield curve. Even the high end bond traders get burned doing this and they sort of know what they're doing."

Great advice. I got 2 mil to invest but I take your point to heart re chasing the yield curve. Thanks.

sailaway - Thank you alot.

exodusing - Thank you too.

muffins14 - "What are you going to use the money for in 11-12 months? Is it a specific bill like property taxes, a down payment, or medical bill? How exact do you need the amount to be in 11-12 months? What would happen if you were off by 1-5%?"

I don't need the money for any of those reasons and anot for an emergency fund. I just want to grow my assets for the future. If I were off by 1 - 5% there would be no negative consequences except for the disappointment at not having maximized my investment.

Thank you all.



Jerry

with just $2M I'd just find a good Treasury index fund/ETF and dump it there and go do something more fun than trading bonds.

[Circe]

I'm not convinced that even Powell knows what he's going to do! You can look at the most recent dot plot to see which dot you agree with....

I have some CDs, some tips, some nominal bonds of varying lengths, some ETFs, some cash. And some iBonds. One or more of those should do well. It helped that I bought some when rates were higher but I was just buying every month last year as I sold or investments matured. I'll probably do the same this year.

[Geologist]

Although we know what you mean from your original post, you should know that the term “short-term Treasury” does not ordinarily refer to money market funds. It refers to bonds with maturities in roughly the 1-4 year range. As just one example, Vanguard has a “Short-Term Treasury Fund” that holds Treasuries with an average maturity (at the moment) of 2.6 years.

[Random Musings]

I can say with confidence that treasuries will be up and down the rest of 2024.

RM

[tibbitts]

I just want to grow my assets for the future.

None of the choices you've discussed would suggest much "growth." Of course 1-2% real growth over time is still growth, but not a lot.

[123]

...I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now...

Treasuries have easier liquidity than CDs so I'd go in that direction.

I've stepped aside from BND and have been using primarily 6 and 12 month t-bills for fixed income the last couple of years.

The SEC 30-day yield on BND is now around 4.5% so I'm tempted to call it a day and take the easy route with BND. You can squeeze yield from a lot of different places but its getting harder. If I'm only squeezing an extra 0.5% I'm beginning to lose interest. On $100K that extra 0.5% is $500 a year, maybe rounding error over the course of a year.

[investing123]

Thanks all.

I should have clarified. When I say short term treasuries I am talking about VUSXX Vanguard Treasury Money Market Fund.

Thanks again and again.



Jerry

[KBR]

I think rates are going down this year. But ... so does everyone so it's not a bold prediction. With that said, I'm not confident enough to bet on it but confident enough to post it as a prediction.

[oldcomputerguy]

This topic is now in the Personal Investments forum.

[nisiprius]

Yes, treasuries will definitely be up or down during the rest in 2024, unless they do not move at all.

In April of 2014, Bloomberg polled 68 economists for their forecasts for what would happen over the next six months to the ten-year Treasury yield. 68 out of 68 of them said it would rise, the only difference being how much.

It went down.

Larry Swedroe used to have a great annual column at the start of the year, in which he would list about ten "sure things" that everybody "knew" were sure to happen during the coming year. Inflation would go up, or whatever. Then at the end of the year he would do his best to score which had come true. It was almost always less than half.

Do not be fooled by things just because "everyone" is saying them. I'm not sure if any financial forecasts are worth paying attention to, but I am very sure that interest rate forecasts are not.

At the very best they forecast what would happen if nothing changed, but something always changes. If cornered, the prognosticators if cornered will say "well, it would have happened had it not been for surprising event X which nobody could have possibly foreseen."

[HomerJ]

The answer is, of course, no one knows.

Put $1 million in each, if it's going to drive you crazy to have picked wrong.

[hudson]

...I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now...

Treasuries have easier liquidity than CDs so I'd go in that direction.

I've stepped aside from BND and have been using primarily 6 and 12 month t-bills for fixed income the last couple of years.

The SEC 30-day yield on BND is now around 4.5% so I'm tempted to call it a day and take the easy route with BND. You can squeeze yield from a lot of different places but its getting harder. If I'm only squeezing an extra 0.5% I'm beginning to lose interest. On $100K that extra 0.5% is $500 a year, maybe rounding error over the course of a year.

I don't think that BND is currently paying 4.5%. On Feb. 6, it paid out 2.79% annualized. I didn't do the math for March 6.
BND also is around 25% A or BBB rated.
I vote all AAA or better with fixed income.

[yankees60]

Yeah, seriously huge question but I am looking for opinions.

I am trying to decide which to buy - short term treasuries (VUSXX) fund or an 11 - 12 month CD. Both around 5.N% return right now.

I'm thinking if the treasury return starts going down, sell and buy VUSXX.

Opinions?

Thanks,

Jerry

What did you end up doing?