CORRECTION: This bond is callable in one year (not two years as stated in the video) 💎Email jennifer@diamondnestegg.com & we will connect you with a colleague who will create your customized annuity plan for you. 💎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 & REFERENCED VIDEOS (where applicable): www.fidelity.com/ www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024 investor-relations.db.com/files/documents/quarterly-results/2024/FDS-Q3-2024-23102024.pdf >>>>>>>>>> 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
I don’t consider bonds like these investable. For less than about 100bp of premium, the buyer is assuming some serious term risk (being a 2045 term) if interest rates continue to spike higher (given the less than 1 year call feature). Instead I picked up a DB bond offering today (secondary market) with a 5.625 coupon, 6/2031 term and a min call date of 3/2028. YTW on that bond was 5.501% (I paid slightly over par). Yes, 55bp less than the 6.05 coupon, but much less term risk, and less “re-investment risk”.
how to know how to measure term risk and re-investment risk on such bonds? so the coupon rate was higher than YTW rate?,, I thought it can not be higher...
I just bought a long dated callable agency bond paying 6.3%. I am ok if called in 6 months or getting 6.3% longer is ok as well. But I get your point if you may need the funds you may need to sell at a loss.
Given this, you can get an agency bond for the same yield for a similar first call date. Given a agency bond is much less risky, I don't see the value in this corp bond. If it was two years, I could. To be frank, it really changed how excited I was for this. I think it's worth a note on the video or something to correct this mistake
I immediately looked up what Deutsche Bank was offering in Germany to Euro customers in 2048 maturity bonds. Alas, the DL19WR bond maturing in 4/14/2048 had a coupon of only 3.5% but sold for 80.0 for a yield of 4.96%. I suppose the low price gives you some protection against early calls. But who knows what can happen in the next 23 years! Servus, Markus!
They were in trouble many years ago when our company absorbed some of its employees and applications, not sure nowadays how they are holding up in the US.
What about the risk that they do not call the bond? In that case, interest rates are higher than what you are getting from them, and you are locked in for the rest of the 20 year term, or if you sell it, you get less than you would if you held it, because your interest rate is less than the current rates.
There is not that much demand for callable corporate bonds in the secondary market. A buyer is likely to charge you a noticeable premium for liquidity, figure around +/- 2.0%.
I only have a few of those, I remember Credit Suisse No, unfortunately, the bondholders of Credit Suisse were not made whole. Swiss authorities decided to impose losses on Credit Suisse bondholders as part of the bank's rescue plan
Not all of the Deutsche Bank bonds are Contingent Convertible. I inadvertently bought one that was, but I have 3 others that are not. After the Credit Suisse implosion I have serious concerns about my Contingent Convertible bond and may dump it at a loss in the future should Deutsche Bank appear to be having signs of trouble.
I made rookie mistake of buying extremely long term Deutsche bank new issues based on video on this channel a few months ago...they immediately started falling in value and one is down 7% now... 2 or 3 months ago. 5 plus percent for 30 years in retirement. Sound like a great rate but I'll be 91 by the time that Bond matures now I wouldn't be surprised if interest rates are double digits by then.
These callables are giving the issuer a 'free' put. Prob not 100% free as presumably they are paying a little bit extra in yield. But they still have full control. The best that can be said is, you CAN sell the CD if you think rates are going to drop BEFORE they call it , and reinvest before that drop happens.
CORRECTION: This bond is callable in one year (not two years as stated in the video)
💎Email jennifer@diamondnestegg.com & we will connect you with a colleague who will create your customized annuity plan for you.
💎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 & REFERENCED VIDEOS (where applicable):
www.fidelity.com/
www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024
investor-relations.db.com/files/documents/quarterly-results/2024/FDS-Q3-2024-23102024.pdf
>>>>>>>>>>
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
I don’t consider bonds like these investable. For less than about 100bp of premium, the buyer is assuming some serious term risk (being a 2045 term) if interest rates continue to spike higher (given the less than 1 year call feature). Instead I picked up a DB bond offering today (secondary market) with a 5.625 coupon, 6/2031 term and a min call date of 3/2028. YTW on that bond was 5.501% (I paid slightly over par). Yes, 55bp less than the 6.05 coupon, but much less term risk, and less “re-investment risk”.
how to know how to measure term risk and re-investment risk on such bonds? so the coupon rate was higher than YTW rate?,, I thought it can not be higher...
I just bought a long dated callable agency bond paying 6.3%. I am ok if called in 6 months or getting 6.3% longer is ok as well. But I get your point if you may need the funds you may need to sell at a loss.
Excellent point, and why I never purchase corporates with maturities longer than 5 years.
All valid points here
I just bought this bond the day before seeing this video. Your approval gives me confidence in my decision. I'm in retirement.
As always, your presentations get a rating of AAA++++++!
Isn't Jan 2026 in one year? not two?
You are correct - we are a year behind
Given this, you can get an agency bond for the same yield for a similar first call date. Given a agency bond is much less risky, I don't see the value in this corp bond. If it was two years, I could.
To be frank, it really changed how excited I was for this. I think it's worth a note on the video or something to correct this mistake
I immediately looked up what Deutsche Bank was offering in Germany to Euro customers in 2048 maturity bonds. Alas, the DL19WR bond maturing in 4/14/2048 had a coupon of only 3.5% but sold for 80.0 for a yield of 4.96%. I suppose the low price gives you some protection against early calls. But who knows what can happen in the next 23 years! Servus, Markus!
Any tax considerations for income from a foreign bond?
Depends. Talk to your tax advisor, not random folks on the internet. She answered your question in the first 2 minutes of the video
Great Video!
They were in trouble many years ago when our company absorbed some of its employees and applications, not sure nowadays how they are holding up in the US.
What about the risk that they do not call the bond? In that case, interest rates are higher than what you are getting from them, and you are locked in for the rest of the 20 year term, or if you sell it, you get less than you would if you held it, because your interest rate is less than the current rates.
DB seems to issue bonds frequently. What are they using all this money for?
What will happen if after 2026 and before the maturity? Can we cash out the bond during the period? Thank you!
There is not that much demand for callable corporate bonds in the secondary market. A buyer is likely to charge you a noticeable premium for liquidity, figure around +/- 2.0%.
What about FHA @ 5.25 10 yr not callable until 2033
The 20 year T Bond just went over 5% and is non callable and easier to sell if needed so .25% more is not enough for me.
how are the Bonds taxed, I have mine in a retirement account, does Germany withhold tax ?
also interested how foreign bonds of this kind are taxed?
I will be more cautious in any corporate bond.
I only have a few of those, I remember Credit Suisse No, unfortunately, the bondholders of Credit Suisse were not made whole. Swiss authorities decided to impose losses on Credit Suisse bondholders as part of the bank's rescue plan
Not all of the Deutsche Bank bonds are Contingent Convertible. I inadvertently bought one that was, but I have 3 others that are not. After the Credit Suisse implosion I have serious concerns about my Contingent Convertible bond and may dump it at a loss in the future should Deutsche Bank appear to be having signs of trouble.
Thanks for sharing!
Don't think I would invest in any long dated bond. 20 years seems like a risk given the amount of debt in the world.
I made rookie mistake of buying extremely long term Deutsche bank new issues based on video on this channel a few months ago...they immediately started falling in value and one is down 7% now... 2 or 3 months ago. 5 plus percent for 30 years in retirement. Sound like a great rate but I'll be 91 by the time that Bond matures now I wouldn't be surprised if interest rates are double digits by then.
These callables are giving the issuer a 'free' put. Prob not 100% free as presumably they are paying a little bit extra in yield. But they still have full control. The best that can be said is, you CAN sell the CD if you think rates are going to drop BEFORE they call it , and reinvest before that drop happens.
I guess Vanguard doesn't have this one
simple answer for me, nooooooo I would not buy
Convertible bonds have the risk of equity in default scenarios with the return of debt. Not worth it. Plus, these bonds will be called anyway.
Remember Credit Suisse? Not for me.
That is a truly idiotic comparison and pure hyperbole and demonstrates that you don’t understand the difference between the two.
The CS bonds that were allowed to default were bail in bonds. Although theDB bonds are convertible, they are not bail in bonds.
ethical Deutsche Bank bonds ?????
No
I can't find this... what is the CUPID #?
#💘🤣