👉 Help keep our one-of-a-kind videos unbiased & sponsorship-free through channel membership - become a super-supersaver member: ua-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin WATCH NEXT (member videos) ⭐ July Live Member Q&A: ua-cam.com/users/livetQJDTNCzf68?feature=share ⭐ Agency Bond 101 Deep-Dive: ua-cam.com/video/ggjZSBS4TVc/v-deo.html ⭐ Understanding Credit Ratings: ua-cam.com/video/0kWPz01qxBc/v-deo.html ⭐ Risks Of Bond Investing: ua-cam.com/video/LBCa2D95cPM/v-deo.html ------ 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.
Those high rates are CALLABLE in a year or so. Best I found on Vanguard about a week ago was 5.3% 10 year, callable in 3 years. The lower rate makes it less likely to be called and at least I get 3 years which fit a hole in my bond ladder - better than yields from CDs and T-notes at that time.
I bought this agency issue on Schwab with no issues. Triple checked: no fee, price 100.00, ytm and ytm both 6.05%! Some might ask why buy this when it will likely be called in a year? The best you can do today buying a 1-year Treasury in the secondary market is 5.35%. Everyone's financial journey is different. If you can tolerate the risk, take the higher 6.05 rate. That's historically an incredibly high rate to enjoy in the unlikely event that rates don't fall.
wow, I just happened to see this bond listing this morning and almost bought it. The 20 year period though was too much with a call in one year. No upside if rates fall (and you get called) and a lot of downside if rates rise significantly and you can't hold to maturity.
during the 08 crash i traded a reit that held primarily agency bonds. They held up much better than the other reits that held non agency. Right now the yield on AGNC reit is over 13% but there is more risk than buying bonds directly because the reit is leveraged
Once again what a great video/tutorial on this topic!👍😎👍👏👏 You have definitely opened my mind up towards government agencies now! $500k x 6% is sure sounding tasty 😋
Would you consider doing a presentation on Treasury 0's ? I need longer dated Treasury Bonds without the income generated by regular Treasury Bonds. I can't understand why the YTM on a Zero is lower.
The State tax free agency bond would be the only option living in a high tax state. Are those agency bonds in the 6% range? As a sidenote, if you look on Schwab, you can enter the coupon number and find the shorter 4-8 week bonds.
@DiamondNestEgg another awesome video - you rock! At 2:05 you said you "prefer to buy new issue agency bonds for the same reason you prefer new issue treasuries", assuming that at is due to $0 transaction fees. But in Schwab's Fixed Income Pricing schedule it shows "Treasuries - new issues and secondary trades" both at $0 pricing. Can someone confirm that there's no transaction fees for secondary treasury trades?
Thank you so much for this tutorial! I purchased $1,000 of this exact bond (just like in the tutorial) this morning. While it said transaction fee = 0 when I bought it, if I look at the Cost Basis column in my account it says $1,010 as if there were a fee. Do you know what that's about? Thank you again!
Hi Tracy. That hasn't happened to us before. I'd suggest calling Schwab to see what they have to say about this. When I spoke to them, the Schwab representative stated specifically that it was a new issue & there would be no fee, so this is a bit surprising to hear. If you have time, let us know what they say as I'd be interested in knowing as well.
@@DiamondNestEgg Okay, I called Schwab's fixed income department, and they said it was a mistake. An actual human being needs to waive the fee on these trades and they missed it. That was a surprising answer, but they said I should see the fee removed within a couple days.
Hi Tracy - thanks for this. I was just about to message you to see what happened when your reply popped up. Glad it's sorted. We'll share with the community shortly that they should check their agency trade confirmations with Schwab.
Good video. I think I'll cash in my I bonds this month. I purchased them in May of 22'. So the timing is good now. I want to ask you about purchasing the new issue agency bond you mentioned on Schwab if I can still find what you did. If the bond isn't called in a year is there a penalty if I decide to cash it out in a year or perhaps two years? At this point I wouldn't have incurred any fees at all and I wonder if there will be a big fee at the time of selling. Thanks. I love watching your videos.
Thank you for the information! I am kind of confused, if they are paying 3.025% every 6 months how does that add up being 6.05% yield per year? Thank you
@@DiamondNestEgg I see at Schwa b now FHLB 6.25% CUSIP 3130AWVA5 Does it look like a new issue you described in this video (initial, auction)? And I think it is state tax-free, yes? TIA
Callable bonds are bonds that can be redeemed or paid off by the issuer before the bonds' maturity date. If the issuer Calls the bond they pay you the face value of the bond along with any interest due up to the date the bond was called. No more payments after that. There are other types of calls as well which don't apply to these Agency Bonds.
Definitely interested in buying secondary agency bonds at Vanguard--I hope you can help. It seems to me like some of their bid/ask spreads are pretty big, so some guidance here would be greatly appreciated.
👉 Help keep our one-of-a-kind videos unbiased & sponsorship-free through channel membership - become a super-supersaver member: ua-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin
WATCH NEXT (member videos)
⭐ July Live Member Q&A: ua-cam.com/users/livetQJDTNCzf68?feature=share
⭐ Agency Bond 101 Deep-Dive: ua-cam.com/video/ggjZSBS4TVc/v-deo.html
⭐ Understanding Credit Ratings: ua-cam.com/video/0kWPz01qxBc/v-deo.html
⭐ Risks Of Bond Investing: ua-cam.com/video/LBCa2D95cPM/v-deo.html
------
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 know what I would do without Jennifer.
Those high rates are CALLABLE in a year or so. Best I found on Vanguard about a week ago was 5.3% 10 year, callable in 3 years. The lower rate makes it less likely to be called and at least I get 3 years which fit a hole in my bond ladder - better than yields from CDs and T-notes at that time.
I bought this agency issue on Schwab with no issues. Triple checked: no fee, price 100.00, ytm and ytm both 6.05%! Some might ask why buy this when it will likely be called in a year? The best you can do today buying a 1-year Treasury in the secondary market is 5.35%. Everyone's financial journey is different. If you can tolerate the risk, take the higher 6.05 rate. That's historically an incredibly high rate to enjoy in the unlikely event that rates don't fall.
Quick learner :-)
@@DiamondNestEgg 💯
What if they don't call? Rates stay the same or go up, how do you get out if you wanted the bond called? Secondary market at a huge discount?
yes. would love to see a Vanguard secondary market tutorial for agency bonds. Thank you!
wow, I just happened to see this bond listing this morning and almost bought it. The 20 year period though was too much with a call in one year. No upside if rates fall (and you get called) and a lot of downside if rates rise significantly and you can't hold to maturity.
during the 08 crash i traded a reit that held primarily agency bonds. They held up much better than the other reits that held non agency. Right now the yield on AGNC reit is over 13% but there is more risk than buying bonds directly because the reit is leveraged
Thanks for your down to earth explanations. I watched several of your tutorials and there's no doubt that I will be watching many more!
Please do a video on Vanguard agency bonds
Yes! Please make a Vanguard tutorial video? Thank you!
why does it have no survivor option? How will that work out if something happens to me?
Love your videos
Just found your channel and learning so much ❤
Once again what a great video/tutorial on this topic!👍😎👍👏👏 You have definitely opened my mind up towards government agencies now! $500k x 6% is sure sounding tasty 😋
Glad you enjoyed the video tutorial
Would you consider doing a presentation on Treasury 0's ? I need longer dated Treasury Bonds without the income generated by regular Treasury Bonds. I can't understand why the YTM on a Zero is lower.
Noted!
Thanks for this, Jennifer.
Yes, very interested in buying with Vanguard, thanks so much
Here you go: ua-cam.com/video/eHf_TJFf4nA/v-deo.html
The State tax free agency bond would be the only option living in a high tax state. Are those agency bonds in the 6% range? As a sidenote, if you look on Schwab, you can enter the coupon number and find the shorter 4-8 week bonds.
I found the same one on fidelity.
@DiamondNestEgg another awesome video - you rock!
At 2:05 you said you "prefer to buy new issue agency bonds for the same reason you prefer new issue treasuries", assuming that at is due to $0 transaction fees. But in Schwab's Fixed Income Pricing schedule it shows "Treasuries - new issues and secondary trades" both at $0 pricing. Can someone confirm that there's no transaction fees for secondary treasury trades?
Thank you so much for this tutorial!
I purchased $1,000 of this exact bond (just like in the tutorial) this morning. While it said transaction fee = 0 when I bought it, if I look at the Cost Basis column in my account it says $1,010 as if there were a fee. Do you know what that's about? Thank you again!
Hi Tracy. That hasn't happened to us before. I'd suggest calling Schwab to see what they have to say about this. When I spoke to them, the Schwab representative stated specifically that it was a new issue & there would be no fee, so this is a bit surprising to hear. If you have time, let us know what they say as I'd be interested in knowing as well.
@@DiamondNestEgg Okay, I called Schwab's fixed income department, and they said it was a mistake. An actual human being needs to waive the fee on these trades and they missed it. That was a surprising answer, but they said I should see the fee removed within a couple days.
Hi Tracy - thanks for this. I was just about to message you to see what happened when your reply popped up. Glad it's sorted. We'll share with the community shortly that they should check their agency trade confirmations with Schwab.
@@DiamondNestEgg Great. I logged into my account today and the fee is gone! 🎉
Good video. I think I'll cash in my I bonds this month. I purchased them in May of 22'. So the timing is good now. I want to ask you about purchasing the new issue agency bond you mentioned on Schwab if I can still find what you did. If the bond isn't called in a year is there a penalty if I decide to cash it out in a year or perhaps two years? At this point I wouldn't have incurred any fees at all and I wonder if there will be a big fee at the time of selling. Thanks. I love watching your videos.
Please talk about Etrade
Noted
How safe is this? Is there a scenario where the principle might be lost?
Thank you in advance for taking the time to reply.
ua-cam.com/video/0l3U0oTIiWY/v-deo.html
Thank you for the information! I am kind of confused, if they are paying 3.025% every 6 months how does that add up being 6.05% yield per year? Thank you
3.025% x 2 = 6.05%
Another great video. A Vanguard tutorial video would be great. Thank you!
Very good!
I guess Agency Bonds are not issued on any schedule?
Not that I’ve found
@@DiamondNestEgg I see at Schwa b now FHLB 6.25% CUSIP 3130AWVA5
Does it look like a new issue you described in this video (initial, auction)?
And I think it is state tax-free, yes?
TIA
Good stuff
I am new to this stuff. What is callable means?
Callable bonds are bonds that can be redeemed or paid off by the issuer before the bonds' maturity date. If the issuer Calls the bond they pay you the face value of the bond along with any interest due up to the date the bond was called. No more payments after that. There are other types of calls as well which don't apply to these Agency Bonds.
Interested in Agency bonds at ETrade
Noted
I would appreciate a vide on E*Trade. I'm a Schwab customer on Schwab too, so do appreciate this video too.
Definitely interested in buying secondary agency bonds at Vanguard--I hope you can help.
It seems to me like some of their bid/ask spreads are pretty big, so some guidance here would be greatly appreciated.