How Long Do You Want 6%? (Best-Yielding Bond Offerings Now That The Election Is Over)

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@DiamondNestEgg Ай бұрын

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@Nicole-zv7ee Ай бұрын

Jen, please do a video about "hard money lending", and your thoughts about it.

@RB2-z7j Ай бұрын

Question: Can you sell these bonds before the maturity date at market rates?

@alwayslearningthankyou2708 Ай бұрын

Is there an active market for these agency bonds in order to sell them prior to maturity?

@alanalew Ай бұрын

Yes. But you will almost certainly lose money doing so.

@ddenuci 28 күн бұрын

yes. You will be entitled to any interest that has accrued. The price u get for the sale bond will depend on several factors including the prevailing interest rate at the time of the sale, the next call date, etc

@DavidLitman-ph9lu Ай бұрын

Those yields look attractive now, but those are some long dated maturities. How low could the price drop if interest rates soar, like they did in 1981 to 15%+? I'm not going to take that chance. I'm staying mostly with short term T-bills for now.

@johnrac3302 Ай бұрын

@@DavidLitman-ph9lu you are correct historically. And they are very long maturities. However with $36 trillion in debt no way the Fed can raise rates that high, they would price themselves into failure to service the debt load. Powell wants to lower rates to inflate the debt away ….. however the new incoming administration knows what he’s doing and doesn’t like it. We shall see what happens

@comingshortly Ай бұрын

I grabbed the 6.25% 30 year agency with 3 month call date. I have many agencies and some under 6% have been called while I still have one at 6.625% that is continuously callable but not called yet. It seems like anything under 20 years to maturity get called but the 20 and 30 year agencies are less predictable.

@stevenlee2654 Ай бұрын

just wondering, are these agency bond liquid enough?

@johnrac3302 Ай бұрын

@@stevenlee2654 define ‘liquid enough’

@johnrac3302 Ай бұрын

FHLB - B3RA3 - 👍 order placed. I like this better than a collapsing German economy, shrinking GDP, no end in sight & no ability to print their way out, and political uncertainties (vote of confidence). Thank you Jen for the FHLB ….

@writetravis Ай бұрын

Agency look best. Keep them short and keep rolling till stocks correct. Then move into high dividend blue chips.

@Δυσνομία Ай бұрын

I understand how the bond issuer can redeem a bond to you if they no longer want to pay that interest rate, but... How do you sell a bond? Do you have to wait for a call date? And when that call date arrives, how do you sell it on that date? And can you sell it after that date, even though it's not a call date? I don't want to hold a bond anywhere near that long.

@cookmaster3626 Ай бұрын

Are these Agency bonds 100% guaranteed like the T Bills. New to Agency bonds and hence the question. Thanks in Advance.

@patrickbaker9040 17 күн бұрын

I read about this issue recently and the answer is No. Although in the past, during one of the financial crises, they were actually granted a "guarantee".

@Nicole-zv7ee Ай бұрын

Jen, please do a video about your thoughts on investing in international bonds.

@mike2852-m9c Ай бұрын

What if I only want 3 or 4 months and pull it out myself at that time. Do I still get the 6+% until I pull it out? Or should I buy a different one?

@pdureska7814 Ай бұрын

I actually just bought today my first agency bonds today. I had some cash laying around and not invested so i bought a 5 year agency bond 5.25% YTW and callable in a little over 3 months. I bought another agency bond that was callable in 1year at 4.98 YTW. So those rates well above similar Treasuries. I've been winding down some of my Treasuries in my 401k and taxable accounts (big slug of municipals through a Schwab subadvisor specializing in fixed income which i think will pay off better in the long run but right now about a wash given my tax bracket). I think Treasuries will fall more slowly given Powell's remarks yesterday so they will remain a big part of my core holdings for now but i will continue to add agency bonds in a ladder. Corporates not so much. Risk is greater (see the Credit Suisse debacle and i think they were A rated). Good to know we have some reasonable choices out there. Love your videos!

@maaxt Ай бұрын

Had several agency bonds in a pretax portfolio. Most have been called. What to do? I have been buying noncallable corporate bonds, rated AA or above. Apple, JP Morgan, Microsoft, Walmart.

@paulstein916 Ай бұрын

In actuality, how likely are these bonds going to be called on their call dates before maturity? Would a 30 year maturity be advisable to someone in their 70’s or 80’s?

@jimc9175 Ай бұрын

I recently had some FHLB @6.25 and 5.75. I expected them to get called and they both got called pretty quick once the Fed started cutting.

@alanalew Ай бұрын

They will most likely be called sooner than later. But there is no guarantee of that. If yields go higher than 6% and stay there, there is no incentive for the issuer to call the bond early.

@jimr4566 Ай бұрын

Please denote which bonds are state and / or federal taxable when you discuss them. Thank you.

@johnrac3302 Ай бұрын

@@jimr4566 FHLB bonds are state & local exempt. They are federal and the state reciprocates

@Ed_Gein Ай бұрын

i have yet to find where this Federal Home Loan Banks Bond website is.

@coryjohnson3429 Ай бұрын

You can find the listing on your brokerage site under Fixed Income, Bonds, NEW ISSUES, Agency/GSE.

@KayKay14m Ай бұрын

6% for at least 3 years for me. However, I have yet to buy these kinds of bonds. EDIT: After viewing these bonds, there is no way I am buying a corporate bond with a negative credit watch warning. I've decided to roll the dice and buy 10 of the Federal Home Loan Banks Bond at the 6.25% rate since the callable date was pretty much February 2025 for both the 6.25% and the 6.0% bond. My first Agency bond purchase! Interestingly, Fidelity no longer offers the Federal Home Loan Banks Bond at 6.0% for whatever reason.

@AxioMATlC Ай бұрын

3 year one is 5.375% I picked up a 2 year for 5.5% a few days ago, must no longer be available

@johnrac3302 Ай бұрын

I have purchased both Treasuries and Agencies. Agency bonds may take some time for the order to be filled. Today the agency bond Jen spoke of at 6.25 took about 30 minutes for the order to be filled. I’m sure this will vary , but personal experience is all I have to share. Good luck 🍀 Edit; congratulations I saw your edited post 😊

@KayKay14m Ай бұрын

@@AxioMATlC The 3 year one was a corporate bond with Jeffries Financial Group.

@KayKay14m Ай бұрын

@@johnrac3302 It took 16 minutes for the trade to execute the minimum order for that bond (10 units). I'm going to assume that it will be called away at some point.

@johnrac3302 Ай бұрын

@@AxioMATlC what is the Cusip of the 5.5 ?

@rodriguesd048 Ай бұрын

The median mortgage rate from 1971 to 2024 is 7.72% the median mortgage rate from 1990 to 2024 was 6.05%. Normal is 6 to 7 % so an agency at 5.35 has a higher probability of not being called if you look at it historically.

@2009duny Ай бұрын

Thank you 😊 you are super.

@ATHJD07 Ай бұрын

Any reason new agency bonds are set with $10K minimums and increments of $5K? (at least in Fidelity, I didn't look in Schwab)

@DiamondNestEgg Ай бұрын

Hi Anne - that's often issuer as well as broker dependent. For example, Federal Home Loan Banks typically has a $10K minimum with $5K increments whereas Federal Farm Credit Banks typically has a $1K minimum with $1K increments. Jen

@ATHJD07 Ай бұрын

Thanks. That makes sense.