Treasury ladder ?

[Q.E.D.]

With interest rates finally offering higher than near zero, I'm creating a ladder with Treasury Bills / Notes.

For those not familiar, that means buying TB & TN with different maturity dates. So far, I've only used 13-week TB to 3-year notes (other than $10k in IBonds, now paying > 9%.) As instruments mature, new maturities are purchased, with goal of having something due say every 1-3 months, and achieve an average yield. As of today, I estimate my average yield is 2.3% -- better than banks or CDs, without locking money for long periods. Even saver than junk bonds, or even questionable banks. Again, for those whom don't know, all Treasury instruments are free of state taxes, but not federal.

I've created a spreadsheet with the basics, but have not yet found either a template, or a stand-alone application that permits following & graph the yield curve, due dates, etc.

Anybody familiar with a template or app to handle above?

I searched on the TreasuryDirect.gov for "ladder." The result was about firefighting equipment!

 

[xandman]

This is good. You will have to google it.

 

[Q.E.D.]

Thanks. So far, trying to look at above, & some others. I'm avoiding registering with firms such as Fidelity, etc., to use their "free" tools, as likely will be forever bombarded with ads, solicitations, etc.

 

[Overnight]

Legging gubment paper? Wow, never thought of that. Good luck!

 

[SoyUnGanador]

Ha! I remember the "Bond ladder" from my finance class in college close to 30 years ago!

Nothing wrong with it, just know its not magic. You could be worse off or better off versus doing it versus any other strategy. I kind of like my version of the bond ladder. The bond ladder eventually gets you to a blended rate of (over time) 30 year bond yields. So let's get there generally, but a little smarter. I call this the "SoyUnPerdedorPeroNadaMasQuieroGanar" ladder. Put some percentage of your money in 30 years today. Put some other percentage of your money in shorter term bonds today. Put some other percentage of your money in the stock market. If the stock market goes down, first use your bond interest to buy more stocks to get your stock holdings % back up. Then if that is not enough sell your short term bonds first, then your long term bonds last, to catch you up on stocks. The result is that you are doing what one should be doing in a falling market, buying more of the riskier stuff (stocks), but slowly and methodically.

Then, if as more likely the case, stocks go up, you can sell off the upside and buy more bonds. Short, long, take your pick, but then there should be some slow, automatic strategy to convert those short bond holdings to long (maybe its only on expiration of the shorts (or mids, again I am simplifying here)).

So, and I am just very much generalizing here, you might start with shorts 50%, longs 30% and stocks 20%.

If after one year stocks are down to 15% of your account balance, any interest you accrued is used to catch you up on that 5% stock shortfall, any excess is covered by selling shorts and only then longs (which is very unlikely you would ever have to do).

If after one year your stocks are up to 25% of your account balance, you sell that 5% and buy more bonds. Shorts, longs, who knows, needs to be some thinking/testing done on this.

Then there is a process to convert your short holdings into long holdings over time. Maybe its just as the short expire, longer ones are purchased, as simple as that. You could keep the 20% stocks in place, or if your REALLY wanted to just have a pure bond ladder that 20% would decrease over time, for example 1% per year. But that will almost certainly hurt your long term returns.

Lots of devil in the details, but something like that will, in the long run, SMOKE a pure bond ladder.

 

[murray t turtle]

Thanks. So far, trying to look at above, & some others. I'm avoiding registering with firms such as Fidelity, etc., to use their "free" tools, as likely will be forever bombarded with ads, solicitations, etc.

%%
YOU can opt out of that; + with their hi fees they tend to have good customer service, almost as good as SCHW does.

 

[TimtheEnchanter]

Fidelity and Schwab (also Vanguard) has CD and Bond leather features.