💎Get our popular bond course bundle & save $80: 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 ua-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin >>>>>>>>>> WATCH NEXT >> Our Bond Courses vs UA-cam Membership | Which Is Right For You: ua-cam.com/video/H5h4Eyh0hjo/v-deo.html >> Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: ua-cam.com/video/uXPzbje1g2E/v-deo.html >> Bond Masters Course Sneak Peak | How To Build A Bond Ladder: ua-cam.com/video/p90IDmXn19s/v-deo.html >>>>>>>>>> SOURCES: www.marketwatch.com/story/treasury-yields-ease-but-still-on-track-for-a-big-weekly-rise-89a3d657?mod=bond-report www.barrons.com/articles/bond-yields-economy-federal-reserve-politics-c20ae730?mod=md_bond_news home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics www.treasurydirect.gov/auctions/upcoming/ >>>>>>>>>> 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
For me (retired) it's pretty simple: longer-term bond yields are up and prices down and the likelihood of the Fed raising interest rates is pretty much zero so I'm locking in rates. I'm a long-time holder of intermediate investment-grade bond funds but for the first time have now bought long-term shares. I don't trade so it's yield that's important to me.
It's a reasonable perspective. I don't share it, but it's reasonable. I have a much more calamitous view of what might happen after November 6th and interest rates of 15 or 20% would not surprise me. If you think it's business as usual after November 6th then your view seems good. I think we're in a period similar to June or July 1914. When no one knew the world would be torn apart. For those who don't know the period too well, just call it the calm before the storm.
@@tim71pos I see your point and, too, worry that whoever "wins" there'll be economic fallout if for no other reason other than the national debt. If the Fed will be anything like Volcker is questionable though. The majority of my bond fund holdings are in intermediate durations (with a smaller portion in short durations). I've only added long-term exposure lately in case interest rates remain low (or the Fed really screws up and lowers them another 50 basis points). I guess we'll see in the next quarter or two.
1) Sometimes Agency bonds ‘sell out’ only to reappear a day or two later. I think sometimes Fidelity sells out of their initial allocation, and then goes back to the issuer for more bonds. 2) I saw an Agency FHLB bond this week for 18 months @ 5.05%. Looked at the first call date and it was 30 days out! That is one quick call date.
I have such mixed feelings about high yield treasuries. Of course who can’t say no to 5% no risk but the US is also now spending more to pay us our interest than it does for national defense or Medicare. 35 trillion debt and growing. Only way to reduce that is purposely devalue the dollar to inflate away the problem. So I don’t know if I should be licking my chops eager for higher yields when that’s contributing to the problem.
Does anytime have an explanation on why the 5y tip this past week auctioned so low at 1.67? It was 1.8 on secondary the day before, and 1.73 the day after.
The answer is: Market conditions at the day of auction. Market conditions fluctuate according to supply and demand of the day, that is the Market for ya. 😘
I have a fairly significant amount of my portfolio in generally the middle of the yield curve (5-7 years) bond ETFs (Treasury, and high quality corporate), thinking that I would enjoy income and capital gains. However, with the long-end bonds moving up, this has me scratching my chin. What are your thoughts about this? I bought all of these before finding you and your community. Thanks. I've been learning a lot from you.
Given the uncertainties in front of us my fidelity money market account, which is paying about 4.5%, looks pretty good. It's better than the CD rates at my local bank. It's very well insulated against interest rate risk. It certainly is a good place to park my funds while waiting to see what the situation is between November 6th and January 20. I'm thinking a good deal about it because I have about 10% of my net worth tied up in CDs that will fully mature between now and Christmas. These CDs at the local credit union are not really competitive with what's available at Fidelity so it's pretty certain I'm going to make a move. But I don't know exactly what and where. So money market fund it is. I follow the ideas posted here with interest (I guess that's a pun).
I just bought 20 treasury's I bought 200,000 worth and it was supposed to be 4.55% but it says it is only 4.125% but It only cost me about 190,000 to buy this. I very confused about this. any help would be greatly appreciated
The 4.125% is the coupon rate on the face value of the bond. You purchased $200,000 bond. You will receive $8250 per year (paid $4,125 twice during the year). You paid about $188,000 for the bond because the prevailing rate for 20-year treasuries being traded is higher than $4,125. Up near 4.588% at the close of trading on the day of the auction. For practical purposes, I calculate the annual interest by the cost, which for this auction was 4.125%/($93.98 per $100 face value), or 4.39%. This is my return in an ongoing fashion for the next 20 years. (Yes, I buy them to hold for income in retirement. Bought this auction, like you.). So, why isn’t 4.39% the relevant rate? Well, in 20 years we receive back the full face value of the bond $100 for the $93.98 we paid, so there is a gain. If you include this income discounted to present day you arrive at the 4.59% figure. That’s how I figure it.
in my financial portal the bond buy are only possible if you have 50K and more which is not possible to buy for me. Are buying CD still safe through Charles Schwab or other websites ? I have bought 5K CD in different banks and well within 200K insurance limits. I hope each CD in different bank will bank individual insurance capacity
My thoughts: Exploding inflation will eventually deadlock the economy and we will enter a major recession (if not a depression), which destroys any notion of a soft landing. Taking a cautious approach with respect to rate cuts is the ideal solution. Rates stay higher for much longer, but the economy should not suffer a 2007-2008 style crash. A rate cut of just 25 basis points is a cut, "jumbo" or not. Will we get one more in 2024? I think I'm only buying TIPS and long-term bonds for any of my future purchases. Also, I've decided to take losses in TLT in early December to help offset my capital gains. Essentially, "kicking the tax can" down the road.
@@theresa922 I agree that we are progressing towards a soft landing. However, if the Fed continues to cut rates aggressively, I'm thinking inflation will jump much higher and that would be very bad. This is a very delicate situation that could be easily upset, which is why I'm saying that I'm in favor of the Fed taking a cautious approach, even though it hurts me as a result of holding TLT.
💎Get our popular bond course bundle & save $80: 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 ua-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin
>>>>>>>>>>
WATCH NEXT
>> Our Bond Courses vs UA-cam Membership | Which Is Right For You: ua-cam.com/video/H5h4Eyh0hjo/v-deo.html
>> Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: ua-cam.com/video/uXPzbje1g2E/v-deo.html
>> Bond Masters Course Sneak Peak | How To Build A Bond Ladder: ua-cam.com/video/p90IDmXn19s/v-deo.html
>>>>>>>>>>
SOURCES:
www.marketwatch.com/story/treasury-yields-ease-but-still-on-track-for-a-big-weekly-rise-89a3d657?mod=bond-report
www.barrons.com/articles/bond-yields-economy-federal-reserve-politics-c20ae730?mod=md_bond_news
home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics
www.treasurydirect.gov/auctions/upcoming/
>>>>>>>>>>
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
For me (retired) it's pretty simple: longer-term bond yields are up and prices down and the likelihood of the Fed raising interest rates is pretty much zero so I'm locking in rates. I'm a long-time holder of intermediate investment-grade bond funds but for the first time have now bought long-term shares. I don't trade so it's yield that's important to me.
It's a reasonable perspective. I don't share it, but it's reasonable. I have a much more calamitous view of what might happen after November 6th and interest rates of 15 or 20% would not surprise me. If you think it's business as usual after November 6th then your view seems good. I think we're in a period similar to June or July 1914. When no one knew the world would be torn apart. For those who don't know the period too well, just call it the calm before the storm.
@@tim71pos I see your point and, too, worry that whoever "wins" there'll be economic fallout if for no other reason other than the national debt. If the Fed will be anything like Volcker is questionable though. The majority of my bond fund holdings are in intermediate durations (with a smaller portion in short durations). I've only added long-term exposure lately in case interest rates remain low (or the Fed really screws up and lowers them another 50 basis points). I guess we'll see in the next quarter or two.
1) Sometimes Agency bonds ‘sell out’ only to reappear a day or two later. I think sometimes Fidelity sells out of their initial allocation, and then goes back to the issuer for more bonds. 2) I saw an Agency FHLB bond this week for 18 months @ 5.05%. Looked at the first call date and it was 30 days out! That is one quick call date.
I have such mixed feelings about high yield treasuries. Of course who can’t say no to 5% no risk but the US is also now spending more to pay us our interest than it does for national defense or Medicare. 35 trillion debt and growing. Only way to reduce that is purposely devalue the dollar to inflate away the problem. So I don’t know if I should be licking my chops eager for higher yields when that’s contributing to the problem.
Do you think it's better to just stick to something like CLO's? I really don't like the duration nor do I like trading it.
Does anytime have an explanation on why the 5y tip this past week auctioned so low at 1.67? It was 1.8 on secondary the day before, and 1.73 the day after.
The answer is: Market conditions at the day of auction. Market conditions fluctuate according to supply and demand of the day, that is the Market for ya. 😘
I have a fairly significant amount of my portfolio in generally the middle of the yield curve (5-7 years) bond ETFs (Treasury, and high quality corporate), thinking that I would enjoy income and capital gains. However, with the long-end bonds moving up, this has me scratching my chin. What are your thoughts about this? I bought all of these before finding you and your community. Thanks. I've been learning a lot from you.
VERY helpful, as always!
Given the uncertainties in front of us my fidelity money market account, which is paying about 4.5%, looks pretty good. It's better than the CD rates at my local bank. It's very well insulated against interest rate risk. It certainly is a good place to park my funds while waiting to see what the situation is between November 6th and January 20. I'm thinking a good deal about it because I have about 10% of my net worth tied up in CDs that will fully mature between now and Christmas. These CDs at the local credit union are not really competitive with what's available at Fidelity so it's pretty certain I'm going to make a move. But I don't know exactly what and where. So money market fund it is. I follow the ideas posted here with interest (I guess that's a pun).
I just bought 20 treasury's I bought 200,000 worth and it was supposed to be 4.55% but it says it is only 4.125% but It only cost me about 190,000 to buy this. I very confused about this. any help would be greatly appreciated
The 4.125% is the coupon rate on the face value of the bond. You purchased $200,000 bond. You will receive $8250 per year (paid $4,125 twice during the year). You paid about $188,000 for the bond because the prevailing rate for 20-year treasuries being traded is higher than $4,125. Up near 4.588% at the close of trading on the day of the auction. For practical purposes, I calculate the annual interest by the cost, which for this auction was 4.125%/($93.98 per $100 face value), or 4.39%. This is my return in an ongoing fashion for the next 20 years. (Yes, I buy them to hold for income in retirement. Bought this auction, like you.). So, why isn’t 4.39% the relevant rate? Well, in 20 years we receive back the full face value of the bond $100 for the $93.98 we paid, so there is a gain. If you include this income discounted to present day you arrive at the 4.59% figure. That’s how I figure it.
I just bought a bunch of 2 yr note since it’s over 4 again. I don’t like to go longer than that.
You can get over 4% with 4 wk, 8 wk, 13wk, 17wk, 26wk T bill,
@@goldl3147 I know but I wanted longer since rates are likely to fall
in my financial portal the bond buy are only possible if you have 50K and more which is not possible to buy for me. Are buying CD still safe through Charles Schwab or other websites ? I have bought 5K CD in different banks and well within 200K insurance limits. I hope each CD in different bank will bank individual insurance capacity
Fidelity allows $1k
Secondary market? Look at Depth of Book.
Great information as always!!
Thank you for the great information.
I wonder if brics countries sell us treasuries as they shift to their future brics based investments.
Thanks so much!
My thoughts: Exploding inflation will eventually deadlock the economy and we will enter a major recession (if not a depression), which destroys any notion of a soft landing. Taking a cautious approach with respect to rate cuts is the ideal solution. Rates stay higher for much longer, but the economy should not suffer a 2007-2008 style crash. A rate cut of just 25 basis points is a cut, "jumbo" or not. Will we get one more in 2024? I think I'm only buying TIPS and long-term bonds for any of my future purchases. Also, I've decided to take losses in TLT in early December to help offset my capital gains. Essentially, "kicking the tax can" down the road.
How do you figure? From all I hear from other financial sources, we are heading for a soft landing. Where are you getting your information?
@@theresa922 I agree that we are progressing towards a soft landing. However, if the Fed continues to cut rates aggressively, I'm thinking inflation will jump much higher and that would be very bad. This is a very delicate situation that could be easily upset, which is why I'm saying that I'm in favor of the Fed taking a cautious approach, even though it hurts me as a result of holding TLT.
@@KayKay14myou may be right but we had low rates for years in the 2010s and also had low inflation so you never know
The sky is not falling, Cletus.
@@pensacola321Wait for it...