My bond strategy...Does this make sense??

C

Cabin1111

Sticky inflation (or whatever you want to call it), I don't buy it. We know the debt...We know we can not grow our way out of the Fed mess.

We also know that China is stepping back from buying US bonds (as we are stepping back from buying junk products from China)...

What I have chosen to do (when a CD or US Treasure bond matures), is look for the best yield US Treasure between 3-9 months out.

The market is indicating there will not be an easing of rates anytime soon!!

If I don't see value in the market (as a retired old dude)...5.??% looks very good with little downside.

To sum it up, for the past year, I have looked for the highest treasure yields...Since I see no lowering of rates in sight.

Nutzo...Or common sense??
 
Cabin1111 said:
Sticky inflation (or whatever you want to call it), I don't buy it. We know the debt...We know we can not grow our way out of the Fed mess.

We also know that China is stepping back from buying US bonds (as we are stepping back from buying junk products from China)...

What I have chosen to do (when a CD or US Treasure bond matures), is look for the best yield US Treasure between 3-9 months out.

The market is indicating there will not be an easing of rates anytime soon!!

If I don't see value in the market (as a retired old dude)...5.??% looks very good with little downside.

To sum it up, for the past year, I have looked for the highest treasure yields...Since I see no lowering of rates in sight.

Nutzo...Or common sense??
More...
Our future looks like stagflation: slow to negative growth, with slightly higher inflation. Although slight dip, the money supply, both U.S. & world-wide are at near record highs.

I keep rolling 4-week T Bills with Treasury Direct. Easy to control, and the Treasury Department does not charge any fees, and since buys are at weekly auctions, there is no bid/offer spreads, both of which I assume you pay if buying Bills/Notes/Bonds, thru a bank or broker.

And funds directly with U.S. Gov't about the safest place:

https://www.treasurydirect.gov/auctions/announcements-data-results/
 
Q.E.D. said:
the money supply, both U.S. & world-wide are at near record highs.

And funds directly with U.S. Gov't about the safest place:
More...

money supply? you mean that worthless $HIT they print called the dollar?

soon buying a loaf of bread will be for billionaires only...
 
I prefer U.S. government bond ETFs (SGOV/TFLO/USFR/etc...). Very liquid.
Most are currently yielding 5.25-5.35%.
No need to keep track of maturity dates & the yield will be adjusted automatically if rates rise.
Most are currently yielding 5.25-5.35%.
Have a pile of CDs but when they mature I move them to bond EFTs.
I'll think about CDs when rates are looking to go lower.
 
Q.E.D. said:
I keep rolling 4-week T Bills with Treasury Direct. Easy to control, and the Treasury Department does not charge any fees, and since buys are at weekly auctions, there is no bid/offer spreads, both of which I assume you pay if buying Bills/Notes/Bonds, thru a bank or broker.
More...

This exactly!!

I do the same.
 
BKR88 said:
I prefer U.S. government bond ETFs (SGOV/TFLO/USFR/etc...). Very liquid.
Most are currently yielding 5.25-5.35%.
No need to keep track of maturity dates & the yield will be adjusted automatically if rates rise.
Most are currently yielding 5.25-5.35%.
Have a pile of CDs but when they mature I move them to bond EFTs.
I'll think about CDs when rates are looking to go lower.
More...

I'll admit that I have some of these, but the performance is inferior to 1 month treasuries via Treasury direct. Current 1 month rate is 5.48% essentially risk free.
no fees in or out.

Treasury direct can be set to auto rollover into new bills. And auctions happen every week so you can have 1/4 of your money freeing up every week.
 
Treasuries aren't the only game in town if you're into bonds.

Junk bond / Treasury spread
upload_2024-5-1_13-18-0.png
 
schizo said:
Treasuries aren't the only game in town if you're into bonds.

Junk bond / Treasury spread
View attachment 339392
More...

I'm unimpressed by those rates.
Especially with the CRE debacle that's coming. I think it's a smarter play to buy SPY if you want more returns than to loan money in an environment where banks seem to be allowed to keep ridiculous asset valuations on their books.

If you look at the price to book ratios of the largest European banks, I can see the potential for a worldwide banking crisis.

Imagine if DB ceased operations tomorrow and the havoc that would cause.
 
Cabin1111 said:
Sticky inflation (or whatever you want to call it), I don't buy it. We know the debt...We know we can not grow our way out of the Fed mess.
We also know that China is stepping back from buying US bonds (as we are stepping back from buying junk products from China)...
What I have chosen to do (when a CD or US Treasure bond matures), is look for the best yield US Treasure between 3-9 months out.
The market is indicating there will not be an easing of rates anytime soon!!
If I don't see value in the market (as a retired old dude)...5.??% looks very good with little downside.
To sum it up, for the past year, I have looked for the highest treasure yields...Since I see no lowering of rates in sight.
Nutzo...Or common sense??
More...

I think you have pretty much nailed everything, Mr.Cabin.
Any investment that shortens an enjoyable life is not doing its job.
Three month T-Bills are fetching close to 5.40% at Schwab.
"A bird in the hand ..."
I think the unthinkable (higher rates) will become thinkable.
I think we can hit 10.00% in some of the ladder.
"Bond vigilantes" is a term from the 1970's (previous inflationary cycle)
But I bet the really cool bond traders with really cool AAPL gadgets
have no idea what that term means.
And the people who know are either dead, or "getting their affairs in order".
As said
"Pride goeth before the fall."
... (Proverbs 16:18)
***
Good luck to you Mr. Cabin.
 
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