Treasury Yields Spike Above 5%! Are You Crazy To Wait For 6%?

[@DiamondNestEgg]

💎Use bonds2025 at checkout to get 10% off our bond courses through the end of January! Learn all about bond investing while yields are high! Get both our bond courses together & save: www.diamondnestegg.com/home#_paa2isucf 💎Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners 💎Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters 💎And join our super-supersaver membership for regular market updates & monthly live member Q&As kzbin.info/door/nexoc6tvesvcCEzZhmI-Agjoin 💎Email [e-mail] & we will connect you with a colleague who will create your customized annuity plan for you or wait for the rest of our Annuities 2025 video series! >>>>>>>>>> WATCH NEXT >> Our Bond Courses vs KZbin Membership | Which Is Right For You: kzbin.info/www/bejne/fmbLZXivnZWboNE >> Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: kzbin.info/www/bejne/q4mzq5WgmpaaaKc >> Bond Masters Course Sneak Peak | How To Build A Bond Ladder: kzbin.info/www/bejne/pmqTenejjdNkb9U >>>>>>>>>> SOURCES & REFERENCED VIDEOS (where applicable): home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics www.fidelity.com/ www.cnbc.com/quotes/US20Y www.bls.gov/news.release/pdf/empsit.pdf www.reuters.com/markets/us/bofa-bets-potential-fed-rate-hike-after-jobs-report-top-wall-st-brokers-revise-2025-01-10/ www.cnbc.com/quotes/US30Y >>>>>>>>>> Here is the overview for Bond Beginners: 1. Bond Basics What A Bond Is & How A Bond Works Why Invest In Bonds New Issue vs Secondary Market Bonds Interest Rates & Bond Prices Current Yield & Yield To Maturity Always Remember This! Buying At Par, Above Par & Below Par Different Types Of Bonds Wrap-Up 2. The Risks Of Bond Investing Seven Key Bond Risks Credit Risk Interest Rate Risk Reinvestment Risk/Call Risk Inflation Risk Liquidity Risk Currency Risk & Country Risk Bond Risk Mitigation Strategies Wrap-Up 3. US Treasuries Overview What Are US Treasuries Why Invest In Treasuries Where Can You Buy Treasuries How Are Treasuries Taxed Wrap-Up 4. Treasury Bills What Are Treasury Bills (T-Bills) When Do T-Bill Auctions Happen Where Should You Buy At Auction Auto-Roll When Buying At Auction Where To Find Recent Auction Results High Rate vs Investment Rate Reopening Auctions Cash Management Bills (CMBs) Buying & Selling On Secondary Market Wrap-Up 5. Treasury Notes & Bonds What Are Treasury Notes & Bonds When Do Auctions Happen Buying Treasury Notes & Bonds Auction High Yield vs Interest Rate Floating Rate Notes (FRNs) Treasury Zeros (STRIPS) Wrap-Up 6. TIPS (Inflation-Protected) What Are TIPS When Do TIPS Auctions Happen Nominal vs Real Yields Negative Yields How Do You Adjust TIPS For Inflation Taxes On Phantom Income Secondary Market Liquidity Wrap-Up 7. I-Bonds (Inflation-Protected) What Are I-Bonds How Does I-Bond Interest Work I-Bonds vs TIPS The Annual I-Bond Limit Wrap-Up 8. Agency Bonds The Universe Of Bonds What Are Agency Bonds How Are Agency Bonds Taxed Treasuries vs Agencies Who Might Want To Consider Agencies Yield-To-Call & Yield-To-Worst Where Can You Buy Agency Bonds Wrap-Up 9. Municipal Bonds Our Bond Universe Gets More Complex What Are Municipal Bonds How Safe Are Munis How Are Munis Taxed The De Minimis Rule Social Security & Medicare Premiums Treasuries, Agencies & Munis Who Might Want To Consider Munis Wrap-Up 10. Corporate Bonds Our Bond Universe Is Complete What Are Corporate Bonds How Safe Are Corporates Corporate Bond Hierarchies Five Key Features Of Corporate Bonds How Are Corporates Taxed Treasuries vs Corporates, Etc. Who Might Want To Buy Corporates Wrap-Up >>>>>>>>>> Here is the overview for Bond Masters: 1. Stocks vs Bonds Historical Performance Are Bonds Really Less Volatile Why Invest In Bonds Accumulation vs Decumulation Allocation of Stocks vs Bonds Wrap-Up 2. Which Bonds Might Be Right For You Treasuries & Other Types of Bonds Nominal vs Real Yields Inflation vs Non-Inflation-Protected Taxable vs Tax-Advantaged Accounts Wrap-Up 3. Bond Ladders & Other Bond Strategies Normal vs Inverted Yield Curve What Is A Bond Ladder 5 Important Bond Laddering Questions Laddering When Rates Are Rising Laddering When Rates Are Falling Laddering When Rates Are Uncertain What Is A Bullet What Is A Barbell Wrap-Up 4. Holding to Maturity vs Selling Early Why Hold to Maturity When To Sell Early Before Maturity Tax Implications Of Selling Early Wrap-Up 5. Individual Bonds, Bond Funds, Etc. Why Buy Individual Bonds Why Buy Bond Funds Bond Fund Considerations Key Bond Fund Concepts CDs vs Treasuries Other High-Yield Investments Wrap-Up 6. Our B.E.S.T. Model Portfolios By Age Our B.E.S.T Model Portfolios By Age Model Portfolios In The Industry B.E.S.T Model Portfolio Difference How Much Do You Need To Retire? How I Use The Rules of 100, 110, & 120 B.E.S.T Model Portfolios (20s) B.E.S.T Model Portfolios (30s & 40s) B.E.S.T Model Portfolios (50s & 60s) B.E.S.T Model Portfolios (70s+) Wrap-Up 7. The Decumulation Phase What Is The Decumulation Phase? Bear Markets & Recessions What Can You Do In Bad/Bear Markets Decumulation Tax Considerations The 4% Rule The Bucket Strategy The Flooring Approach Jen’s Bucket Strategy With A Twist Wrap-Up >>>>>>>>>> Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY

[@nooneyouknow4234]

Thank-you Jennifer for sharing your good-will, enthusiasm, humor, and knowledge with the world...we need more like you!

[@NormanSmith-m8f]

The 10 year treasury reached 15.84% in 1980. I’m old enough to remember that. Very bad things can happen if inflation takes off. Let’s wait and see where policy leads us.

[@jackzfun]

Me too. But, I don't think people seem to believe this actually happened!

[@rythemsold]

I remember those days as well. Had some friends whom purchased a house during that time. Needless to say, the financial burden proved too much for the marriage. The bank foreclosed.

[@Barbara-b9m]

I'm with you. I remember that too. I had 30 year bonds that I held for 30 years that I bought in the 80s and they were good to me. I also remembered deep tax cuts without talk and no action on spending cuts. Bond guys demanded high rates. Trade wars, authoritarianism sweeping the globe . Chinese might not want to buy US Treasury bonds etc.

[@neil3747]

If you wait it will be too late, you have to dabble in, in planned increments. I’m liking 5-6% rates for 10 years more than an inflated frothy stock market.

[@anthonybartlett221]

Well said and I also remember.

[@Mike-123]

Man, 20 years is a really long time.

[@gregh7457]

fire insurance companies will have to start liquidating assets to pay for claims and we could see a spike in longer term bond rates

[@sandrahoward5512]

Thanks, I’ve been buying 1 month TBills in my emergency fund account. I don’t think I should buy 2, 5, 7, 10 year bonds with my emergency fund.

[@yl6128]

totally agree. did some math for my particular situation for long term bonds (even if the interest rates are 6%) is a wash. the interest needs to be at least 7%+

[@alonsalomon6329]

I own alot of sgov etf

[@user-nw5ud4hi3k]

As the yield curve continues to normalize I am buying T-bills with my emergency fund as well. They are currently yielding more than my Amex saving account.

[@sco0tpa]

Agree, emergency fund is because emergencies can happen. Good idea to keep it liquid but still getting a good rate. The added interest for going out further isn't that great.

[@Bailouts4Billionaires]

For the moment I like laddering six month and 1-yr treasuries to still get monthly liquidity and terming out just a bit. Maybe rolling over 1 month treasuries would work out fine, too, but I’m still worried about more rate cuts with this particular fed. Thanks for sharing your thoughts and strategy in the current environment.

[@bobbenavides]

if inflation seems to be going up, I was planing on selling some iBonds but now maybe I wait. How will iBonds be affected by recent changes?

[@jsore]

Staying with short term treasuries for now, however I moved 10% of my fixed income allocation to senior bank loans (FLBL) paying around 7%.

[@selma5885]

This looks good. Is there principal risk? What conditions would creat that?

[@participantparticipant506]

Looks like we've turned the 40 year interest rate cycle. Higher for longer now. Also the reverse repo facility is nearly empty, so that buffer is gone. Still laddering 4/8/13 week T-bills for now.

[@justmyopinion4now]

Holding for higher 10 yr rates.

[@Miclpea]

She is amazing!

[@ScooterOnHisWay2024]

💯 % true. Nobody on YT does this better than Jennifer does here.

[@pauljoseph2400]

When long term bond rates jumped over 5% last fall, I was able to purchase an 8% fixed (no fee) annuity through my employer retirement plan. Thinking about doing that again, just have to time it right.

[@johnrac3302]

Not to worry Marcus we all have purchased a Christmas gift 🎁 from the ‘clearance’ isle. Doesn’t mean we don’t love them to pieces …. It just means we know a good buy when we see one!!!!! And isn’t THAT what Diamond Nest Egg is all about?! ❤😂 Your a good man Marcus but please next year help us all out and get her an ‘ A List’ crystal ball 😊

[@RagedContinuum]

I keep rolling 1,2 months out but maybe I'll start to ladder into longer treasuries.. I just want to maintain 4% yield as a minimum on my existing holdings but maintaining liquidity is important

[@drewgambill1432]

I like my floating rate fund best the last several months.

[@fadyhanna4342]

Waiting to the last week of January before buying more Treasury. Expecting more bonds volatility in the incoming two weeks

[@tmitch18349]

Wealthfront is still paying 4.00% APY in their online HYSA, with the opportunity to get it boosted to 4.5% for 3 months if you refer someone to the program. $8mil in maximum FDIC insurance since they spread your money across lots of banks but taxed at fed and state levels as normal income.

[@Hps-vy8qk]

Waiting for higher, maybe never goes to 6% as market poops before that

[@edexter97]

I have a tax hit with a ten year withdrawal rule if I do bonds instead of gold odds are in favor of gold esp with the tax advantage of not needing to take earnings.

[@Nicole-zv7ee]

Jen, please do a video showing us how to invest in bonds, within a Roth IRA. Thank you.

[@suyi33]

Yes, please 🙏

[@peterbedford2610]

Given the financial implications of 5% or greater on our system, its probably a good idea to get some now.

[@jgibbs6159]

The Fed can't afford to let it go to 6%+, they will buy it all this year to keep their cost down - imo.

[@Slide61]

Scary times for bonds. Buy at 6% and it goes to 8%.

[@daddygc5814]

That would be a great problem to have

[@i_like_beer-o2f]

8% would bankrupt the government. Even 6% will.

[@Nicole-zv7ee]

Jen, please do a video explaining why interest rates differ from the "coupon rate". Also, please explain which amount is actually received, the interest rate, or the "coupon rate". Thank you.

[@ronmorosey672]

the coupon rate is what you receive..for example if a 20 year couponj is 4.625, you get that based on par , which is $1,000... if the price of the bond goes down you get the same coupon for less money, therefore the yield is more

[@Nicole-zv7ee]

@@ronmorosey672 Thank you!

[@Jul31000]

Why not just do a low cost index fund or bond ETF ? What is the benefits of your strategy ?

[@isabelabello1166]

Please do a video on preferred stocks? How do they compare to bonds? What is theirnplace in a diversified portfolio? TY

[@ec193]

lol @ the crystal ball that Marcus gave you for Christmas 😂 You’re the best! Thanks!!

[@etutlf4176]

Why would one lock up money for 20 years at 5% or even 6%? Does not make sense to me. Can anyone please explain? Over a 20 year period stocks will do much better than 6%.

[@SunvalleyMetaphysical]

For retirement fixed income you can count/plan on. .....Seems like when I buy into the stock market, my timing is off most of the time and the market keeps going down until I run out of cash and then can't take the pain and sell at a loss. If there is a correction, I will buy in with 25% of my portfolio.

[@gregmetz5401]

Bonds, unlike stocks, offer predictable payments of interest every month, quarter, half year, or year. Then at the end of the term the principle amnt is repaid. you are giving up chance of larger gain in exchange for regular predictable income stream. Can be useful for retiree who is wo steady paycheck as in working years.

[@ChristopherEvans-650]

Transitioning out of my 6-month T-bill ladder into creating a new ladder of 10, 7, 5, 3, and 2 year T-notes. Buying these on the secondary market.

[@jadehike]

@christopherEvans-650 are you buying below or above par? Will you hold to maturity?

[@ChristopherEvans-650]

@@jadehike So far, I have only purchased a 10 year T-note maturing in 11/2034 coupon rate of %4.25 paying $38,600 for a $40,000 par value. So below par and will hold to maturity. Yield to maturity is about %4.73

[@742East3rd]

Good idea with the laddering

[@jadehike]

@@ChristopherEvans-650 thank you ;)

[@jadehike]

@@ChristopherEvans-650 recently I've become aware that if I buy a treasury below par, then the amount below par is subject to capital gains. I'm mostly interested in the coupon, and I'm not sure how to think about whether under or over par is advantageous.

[@987654321act]

I'm already making 6% with agency bonds.

[@danielmarchisella8895]

still risk with those

[@johnmayer4199]

I bought agency bonds when above 6.5 and 7%, they where all painfully called within 3-6 months. If I cared to buy agency bonds at these higher rates again and want to extend the call dates I'd buy a discounted bond on the secondary market at a lower coupon rate then a new issue rate. Rates fell so fast fear had folks chasing rates down thus the higher coupons where called ASAP, as long as your coupon rate matches or is lower then the new issue coupon rates I'd suspect your calls will be delayed. Anticipate and plan to be called if and when rates begin to drop.

[@jsore]

Rated AAA. Nearly as safe as treasuries.

[@danielmarchisella8895]

@@jsore I have a couple of those with banks, but I remember Credit Suisse. I'm not as confident on the banks long term. AAA can be downgraded over time also.

[@bryanc8275]

What's the strategy in locking up money for 20 years? Is the 60 basis points over a mmf worth locking up for 20 years? On a $100k account, that's like $58 a month difference

[@742East3rd]

Agreed

[@bryanc8275]

@@lazarosvetsis813 the rate is 5%, not 6%. A MMF is 4.3%. A difference of $700 a year or $58 a month

[@bryanc8275]

@@lazarosvetsis813 this is wrong. The video mentions 5%. With MMF at 4.37%, the difference is about $58 a month

[@ctbale1]

But the mmf could go to 1%

[@Bailouts4Billionaires]

I had this same general question back in ‘08, and then rates were cut to zero and I found out why getting a longer term can be a good thing sometimes. Good luck to everyone here.

[@swingman50]

So how is the interest paid on these 20 year Treasuries? Quarterly? Annually?

[@vivisimonvi]

Twice every year, or every 6 months.

[@armandoduarte2132]

I will continue to DCA on 5 to 10 year notes and TIPS. I got 10Y notes and TIPS last Friday. Hedging my bonds against inflation

[@DiamondNestEgg]

Sounds like you have a plan Armando!

[@armandoduarte2132]

That’s all thanks to your videos and courses, Jen!

[@peavy4444]

I’ve been buying into vgsh 1-3yr treasury etf for my “cash” positions with about 50/50 in that and vmfxx Slowly moving out of cds to strictly vgsh. Only longer bonds I hold are I bonds. I’m 20 years till retirement.

[@kyriakoskitsios]

We as international investors from Europe this is good news.

[@johns512]

Hey Jennifer, what do you think of JAAA or JBBB and other CLO backed ETFs? Love your work!

[@pdureska7814]

still have my shorter term Treasury ladder mainly for expenses and RMDs. I have lengthened my bonds by picking up agency bonds the past few months (most are callable in the next 1-2 years) and most of those were well over 5% other than 1 shorter term 5year bond that was 4.9% yield to worst (call). I have a sleeve of individual municipal bonds in my taxable account that are intermediate term and a similar sleeve with taxable municipals , corporates and a few preferreds in my 401k. Buying a 20 year Treasury even at 5% has some risk. I dont think the spread between Treasuries and Junk Bonds is wide enough.

[@cmdrgabeet]

Hi, All :)! So I've seen Agency Bonds like FHLB reach more than 6% with 20 to 30 year maturity, and yes, I know that they are callable...But if they were not called, wouldn't they be better at the moment when 20 year treasuries are only around 5%? And as far as I know, Agency Bonds like FHLB are also not state-taxed like t-bonds and t-bills? Really curious about what the DiamondNestEgg community thinks. Am I missing something? Thank you :)!

[@johnmayer4199]

Perhaps the new admin can create and market new and exciting Agency Bonds with inviting call dates within a variety of common social needs, folks could put their money where there mouth is on what is important to them. The Treasury needs a facelift and must innovate without requiring desperate measures to stay afloat every 6 months or so. Just a thought.

[@INGRIDSAUSAGE]

Very Good.

[@poolmilethirty2859]

The yield curve is still negative on the bank issued CDs

[@akzoc]

I wish you’d concentrate, or at least give equal time, to non-callable bonds. I’m typically not interested in callable bonds.

[@darwinjina]

I would like to know why/what is causing this rate and if its an indicator of future

[@flexjay87]

Temu Crystal Ball ? :)

[@MarionBlair]

20 years is a long time. I'm adding to VCIT ETF(investment grade Corporates)

[@dialectic5012]

I plan on retiring at the end of the year. I'll be 65. I'm looking for recommendations on low risk income generating bond funds for some of my portfolio. I would be happy with 5 to 6 percent after fees. Do I need to look at actively traded funds try to get more?

[@aykthenike]

I'm starting to buy TLT, TLTW and TMF

[@buggsmcgee9270]

Too early...

[@andygeiss9327]

​@@buggsmcgee9270 are you basing that on the chart trends or the historical average of the 10yr minus Fed Fund Rate data?

[@cjay3543]

@@buggsmcgee9270 How do you know when to start buying TLT?

[@chesslover8829]

Do we trust the government to make good on a twenty-year T-bill?

[@commonsense6967]

Nope.

[@Kayakc-0]

They can always pay me back with some federal land

[@Barbara-b9m]

Waiting for higher yield.

[@742East3rd]

That's what people said when rates were 14-15%....I'll wait, it may go higher. Those who waited loss out completely! Take a stand!

[@Barbara-b9m]

​@742East3rd With potential for tariffs and trade wars as well tax cuts without any real plan to cut spending yet, potential for inflation I'm simply not wanting to lend money to the government at 5%. I want a higher rate. Read a little history of the 80s and see what happened in 1981 when there were tax cuts, and then there was no follow up to cut spending and bond vigilantes got impatient and decided they needed a higher rate. Yields went as high as 15% in 1981. You can take the 5%, I am not willing to lend at 5%.

[@Barbara-b9m]

That's my stand. I've taken it.

[@DiamondNestEgg]

Thanks for sharing Barbara. We know quite a few are. Best - Eva

[@ErikSaur-y8n]

There is a Freddie Mac 6% 15 year available now, and a Bank of America 20 yr at 6%, too. Would you recommend the DeutcheBank 6.09% 20yr over both of them?

[@imdoc7872]

Omg. Over 5%! The market is going to tank this week. Buy buy buy

[@nickmrt2670]

I guess the central banks are not buying the debt market lately , thus yields are higher. Do they finally have some compassion for the saver? lol… not a chance

[@murraypassarieu9115]

Yes you are

[@Huntbox]

I plan to purchase the new issue 10yr TIPs at auction on Jan. 23rd. As per David Enna at TIPS Watch, who always provides good analysis.

[@DiamondNestEgg]

I think Jennifer will be covering this in this weekend's update (with a closer look in the Bond Beginners live). Best - Eva

[@Tenn1951]

I am lowering a tad my treasury bill purchases each week, in part due to my bond ladder being full in that time frame, and tiptoeing into treasury notes with 4% or higher coupons maturing in 2027-2033. I bought a 4.5% treasury note in the secondary market last week that had a YTM of 4.744%. That picks up most of the 20 year treasury bond yield without the same interest rate risk. Those treasury note yields (2 to 10 years) will look better to me when and if the FED cuts the federal funds rate by 50 basis points during 2025, as currently predicted my Goldman Sachs and others. I am addressing that possible scenario by going further out in maturities, but a 10 year treasury is my limit in time.

[@LouS-n4j]

Great work Jennifer! Ah yes that 20 year treasury at 5% put your head on your pillow at night and sleep like a baby!

[@jwalk4491]

So I had a question. So if the intest for 20 ear will give me more intrest then principal how is that calculated? Since when you buy a t bill your intrest is deducted from the purchase price. Thank you in advance.

[@gngan]

She already did a video on it. Perhaps search and learn.

[@go2gym]

Yes, you are crazy to wait, IF you want the income. Predicting is a fools errand. 5% is a great rate.

[@jmatt98]

I don’t understand bonds. Why would someone hold their money for 20yrs for 6%. The S&P goes up that much every year.

[@i_like_beer-o2f]

The S&P 500 can go nowhere for 20 years, it's happened before. Bonds outperforming stocks happens like 35% of the time

[@ScooterOnHisWay2024]

I myself have only gone from cycling through 8 & 13 weeks tbills up to 6 & 12 month tbills, adding the *occasional* 2 or 3 year note - and lower $ buys on those longer ones.

[@Chris-bl5fs]

I love how this channel brings bond investors investing and laddering at 8 week/3 year horizon like you, as well as investors investing/laddering with a 30+ time horizon.

[@blairmyers7895]

Wall Street always overreacts and overanalyzes market predictions… remember at the end of 2023 Powell said they would cut rates 3 times in 2024, Wall Street interpreted that as 7 rate cuts. Now it’s the opposite, markets are predicting that inflation will skyrocket because of Trump tariffs even though they haven’t been implemented and we have no data on the result of tariffs. I’m currently scaling into TLT.

[@golt4576]

Why not invest into SNSXX?

[@haldriver1378]

Say we get 6% on the 20yr. That's a decent return, but, at maturity we get our cash back that's only worth half what it was originally. What did we really make? I'd like to see that calculation.

[@atkim122]

It barely stayed above inflation, to answer your question. After taxes that 6% is 4.68% for most people. If inflation is 3% moving forward, we barely make 1.68% while the par value at maturity ($1K) lost half its purchasing power at the end of the 20 years. That's why I need to take more risk and buy quality dividend growth stocks whose dividends increase over time along with its share price.

[@haldriver1378]

@atkim122 yeah, that's about what I was thinking. Better than holding cash, but just treading water. I'm sticking with Tbills for now, and like you buying good dividend stocks later... but not yet. These crazy valuations need to come down. Probably SCHD for starters.

[@987654321act]

@@haldriver1378 I'm thinking the same. Wish us luck!

[@hkraytai]

The purpose is not to profit from these bonds but to hold money with no risk to ride with inflation. It’s good for long term security for those saving for retirement years. How inflation will vary over the next 20 years is anyone’s guess.

[@ronmorosey672]

@@atkim122 all depends on your age and risk tolerance, your stock portfolio can easily be cut in half in a bear market

[@NormanSmith-m8f]

Once inflation is allowed to get out of control the fix will be very painful. The rhetoric we are currently hearing about possible future policies is less than comforting. Many of the most respected economists are also concerned. Let’s hope things calm down.

[@ctbale1]

It's going to explode

[@gabrielw7773]

Dollar cost average these higher yields until the stock market can't stand it and those who own stocks want to own bonds instead.

[@joweb1320]

Waiting for higher yields. Guessing inflation will ramp up again with tariffs coming.

[@lovematters7122]

Do Bonds and Treasuries work differently through workplace mutual funds in terms of maturities etc.?

[@selma5885]

Ray Dalio says don't buy debt.......inflation..... thoughts?

[@samh6761]

I'd be very tempted in 2 to 5 year durations if they go above T-bills much more but I don't want to lock up my funds for any longer than that. If I were closer to retirement it might be a different story.

[@ScottBrooker-oh5ym]

Maybe the rates jump after the inauguration, that way MSM can blame Orange Man Bad!

[@NormanSmith-m8f]

Why not wait till after 20 Jan to see if tariffs are enacted? That’s only 8 days away. The news coming out of Washington is all over the map. Does 8 days mean that much long term?

[@thetjt]

You reckon Trump will install tariffs on first day or not at all? Doesn't make sense...

[@thomascrew8268]

Wait for the new policies to kick in.

[@robtam7529]

Do you have to hold them until maturity? If I am 61 and nearing retirement, where should I park cash to get a decent return?

[@FunTimePlaying]

You do not have to hold until maturity. The treasury market is very liquid and you call sell all or part in $1,000 increments. Just hold the treasury bond in a brokerage account.

[@67NewEngland]

- 5:08 Please explain this strategy, I’m learning. If you were retired or about to you’d have bought more 20yr T bonds? Isn’t 20yrs a bit long for someone who is say, 65yrs old? I’m assuming they’d hold to maturity and not enjoy the profit until 85yrs old. Or are you planning on selling prior to maturity?

[@FunTimePlaying]

If I buy $100,000 of a 20 year t-bond with a 4.5% coupon I'll earn $4,500 per year - $2,250 paid to me every 6 months and I can use that money however I'd like. I don't have to hold the bond for 20 years either - I can sell at any time (whole or partial in $1,000 increments) in my brokerage account. The treasury market is very liquid.

[@tmitch18349]

@@FunTimePlaying Correct. In theory, yes you would need to wait the full 20 years to get your full principal back at the 4.5% rate but bonds can be sold at any time, and would be a good thing to consider if rates decline in the future.

[@go2gym]

Can still get a 5.6% MYGA, 6 yr term. 5.45% for 7 yr.

[@Ann-yk3sl]

Not buying any nominal Treasury as long as 20 years, which extends past my life expectancy. My kids will just sell it, perhaps at a loss. Might do a 10 year Treasury if the rates increase. Right now I’m more inclined to do the 10 year TIPS, as I expect inflation to be a continuing problem for the next several years. I’m also maintaining my 3 month T-bill ladder for unexpected expenses.

[@FunTimePlaying]

I don't get it when folks comment that they don't want to tie up their money for X period of time. You're not tying up anything. The treasury market is very liquid and treasury positions (or partial positions) can be sold as easily and quickly as stock (if held at a brokerage). Of course you run the risk that the treasury may lose value, just like you can lose value in a stock. You can gain value too. Just don't think if you buy a treasury for X number of years you have to hold it for that long.

[@Ann-yk3sl]

Holding to maturity is the only way to guarantee you’ll get that yield. Many, maybe most, bond investors are looking for stability.

[@andygeiss9327]

If we review the 10yr minus Federal Fund rate historical data, those asking about waiting for 6% have a good question.

[@Ed_Gein]

i dont uderstand how they work. do you buy a 20 year bond then it gains .416% per month and you cash out as you need it such that what you take out had gained 5% annual until you sell it and the rest continues to earn?

[@FunTimePlaying]

To make the numbers easy, let's say you purchase $100,000 of a 20 year treasury bond that has a 4.5% coupon. You'll receive $4,500 per year ($2,250 paid to you every 6 months). The bonds do accrue interest daily, but it's paid out every 6 months according to the bond's schedule (Feb&Aug, May&Nov, etc.). If you sell all, or part, of your treasury bonds prior to the next scheduled interest payment you'll receive the accrued interest up until that point, whether it be a day, week, or several months worth of interest. Same thing happens when you buy a bond on the secondary market - you'll pay the current price of the bond along with any interest accrued since the last interest payment.

[@someparts]

People still believe the BLS? LOL

[@eIonmusk542]

Reality based people do. Until MAGA runs it into the ground anyway

[@nadruik9890]

With the long end being higher than a year ago and short end being lower, does it not appear to be doing a bear steepener to you? Almost scared to enter anything duration without some sort of confirmation although a collapse in the economy would shake the rate down fast.

[@SOP83]

I'm waiting for 10%+. This government is too high of a risk to loan cash to.

[@adventuresonvancouverislan3875]

Buying 100k a day of TLT. This is insane.

[@fengjikangqiang]

Shorting TLT makes more money.

[@vince1012]

If you think they're going to 6%, short T-note futures! (Don't buy treasuries unless you think rates will go back down)

[@Golden.5555]

I am waiting for yields higher on 10

[@DiamondNestEgg]

From Jennifer: "I don't think you're the only one" 👋 Eva

[@athenatong3768]

For the 20 year bond, what if you need the money before maturity? Can you take it out early with partial interests?

[@nadruik9890]

you could sell it on the secondary market for a slight spread. Would gain or lose depending on where the rates are at that time.

[@mikeknoll1130]

That’s my question.

[@mikehornick4971]

If rates rise, you sell at a loss of some principal; if rates fall, you sell at a gain. If you never sell, you receive interest only until maturity.

[@johnmayer4199]

They can be sold on the secondary market and you will collect the accrued unpaid interest.

[@athenatong3768]

⁠does it mean you need to purchase from brokerage firm instead of treasury website?

[@dassa0069]

I am in 30 day treasuries. All else is long term. All else is speculation. A dollar crisis is unfolding. Gold is the only money you can trust; all else is credit. All else is someone else's liability. Just saying.

[@agentcontrast9784]

can you do a video or describe how you bought 20yr treasuries on secondary market through fidelity...did you get the 5% annual yield?

[@philipvonrichthofen225]

On the secondary you get what is available. Most likely she purchased a lower annual yield around 4.6% (coupon/price) with the remaining due at maturity like a zero coupon. I was curious myself.

[@dialectic5012]

What are your thoughts on etf's like SGOV yielding 5.10%?

[@jeffhogueison1656]

Absolutely. Selling some of my over-priced stock then buying that SGOV tomorrow Monday for more safety and regular modest gains. I am retired so I want more safety. Oh yes you got liquidity over a 20 year treasury if you need your money quickly.

[@DavidLitman-ph9lu]

The 5.1% is the "distribution yield" over the last 1 yr. The "SEC yield" over the last 30 days is 4.48%. But past performance is no guarantee of future returns. These numbers will almost certainly be lower the next time they are reported (at end of month).

[@jeffhogueison1656]

@@DavidLitman-ph9lu thanks for the insight

[@Bailouts4Billionaires]

There’s also nine bps of expense ratio to pay. Why not just buy and ladder the short-term treasuries through treasury direct? Although admittedly this route is easier and you have instant liquidity, it comes at a cost.

[@SomeGuy-ws5zj]

Inflation is not 2% you are loosing money. PBR gives more.

[@Bailouts4Billionaires]

Petroleo Brasilero has an enticing 20% dividend, but why is it so volatile? Is that dividend safe? Seems like you could really lose your shirt if there was a severe downturn and oil prices tanked. Good luck to you.

[@lynnstockman]

😊

[@ds94703]

Of course you arent crazy to wait for 6% treasuries. Trump's Tariffs with gaurantee higher rates. Stay in high yield money markets for sure. inflation is the real enemy. If you can do a barbell, you might even want to invest in some equities, dividend aristocrats, or just buy the $VIG etf on one side and $SNAXX or a money-market fund on the other side. By all means build a CD ladder to lock in some of these higher rates. My bias is toward prudent risk aversion.

[@Michael-we9vp]

The real pain for the stock market will begin when the orange mango implements tariffs.

[@8356-4]

No one in the US knows how to save money. Interest rates will go down...I am getting ready for that.

[@geraldf.1222]

NEVER, EVER, BUY 20 YEAR MATURITY BONDS!

[@nooneyouknow4234]

Hi Gerald, I think I can guess why you wrote that, but could you please elaborate further? Thank-you!

[@stewartashton6997]

We're buying CMB's weekly during this transition from Biden to Trump.

[@TheTangoAlfa1]

Why have your money stuck at 5% for 20 years, when you can put it in the market and get 10%?

[@ScooterOnHisWay2024]

Or lose 30%?

[@ctbale1]

​@@ScooterOnHisWay2024 or lose 45%

[@Bailouts4Billionaires]

The market’s at a 38x CAPE at the moment, and historically that hasn’t worked out so well. It was this pricey in the late 90’s and not even this pricey back in ‘08. But who knows, maybe it’s “different this time?”

[@smk-q1s]

I have a nagging feeling that #47 is going to default on the treasuries

[@nickmrt2670]

What bearing does #47 have to do with that? The Federal Reserve is their own entity and answers to no one

[@ScooterOnHisWay2024]

If #46 didn't, nobody will.

[@ctbale1]

#47 will default and blame it on #46 and #44. That's what he does