I’ve had SGOV for quite while. Just wondering if it makes a difference at what point in the month to sell it. At the peak or after the distribution but stock drops in price?
Have sgov. Will probably migrate to xhlf with contributions going forward and reinvest distributions of SGOV into xhlf as well. Even though it’s minuscule I’d like to capture LTCG with the price for SGOV still where possible. It’s probably not worth my time to try to squeeze this level of tax efficiency/fee differential but I also have the time and view this like solving a crossword puzzle.
awesome info thx. i hold sgov for my cash reserves and tried my luck with TLT (i know it is not Tbills) but considering getting out of TLT and maybe go with BOXX
When I get a round tuit, I'd like to compare their Price charts. One reason I like SGOV and TFLO is their very low volatility. Sure, the price has gradually increased as interest rates increased and people re-invested distributions. When rates decrease, I expect the NAV to gradually decline, however it won't plummet like long duration bonds. I wouldn't call them "cash" because the price can vary, but they don't have dramatic day-to-day fluctuation. When I need a _cash equivalent_ in my M1 Finance pie, the relatively steady, low volatility SGOV and TFLO work for me.
Thanks for the video ! I have a question for you guys (if any want to add 2 cents) - Im not in the USA nor Im a USA citizen, but I do have a brokerage account in the USA where I can trade ETF's. Considering the possible escalation of a war between Russia and OTAN and looking at market movers like Buffet selling stakes in Apple to buy T-bills, I wonder if its time to be on the safe side and sell my QQQ and VOO Etfs and rest in treasuries for awhile. Question : Is there any difference between investing in ETF's like BIL or SGOV compared to buying the T-bills themselves ? I mean in a world crisis scenario are these ETF's less safe than holding the T-bills themselves ? Thanks if any would give an opinion.
Not much difference other than the obvious fee of the ETF. If the ETF - or its provider - failed for some strange reason, you'd still own the bonds inside it. Bond ETFs are just baskets of individual bonds.
John, with Fed cuts likely coming in the back half of this year…..would be curious to get your thoughts on migrating short term t-bill assets to longer duration bonds. Thx
I divorced SGOV after seeing the tax benefits of BOXX. Now with potentially falling interest rates, I'm rotating that money back into equities and long term bonds
@@ww313ww Maturity is the life of a bond. For a simplistic hypothetical example, if you buy a 1-year bond with a face value of $1,000 and a coupon rate of 5%, it will pay $50 (5% * 1000) over that year (monthly payments of $4.17) and then you'll get the principal back at 1 year, at which time you'd have $1,050. We'd say your return was 5%. T-bills don't match up with that example perfectly because they don't actually pay interest; they are sold at a discount and the difference between that price and the face value is the imputed "interest," but the point is T-bills are bonds with maturities less than 1 year. So a 3-month T-bill will mature in 3 months. If its annualized yield is 5%, its implied interest would be that same $4.17 per month but for only 3 months. If it has a face value, it would be sold at a discount of about $987.50 (1000 - 4.17*3). These ETFs I mentioned here buy and sell those T-bills for you so that you don't have to, and they pay out that effective "interest" monthly. Because T-bills have such short maturities, their yield will rise and fall quickly with interest rates. I actually have a video coming tomorrow that explains how T-bills work.
Yield on these changes week to week, and since they're all T-bills, they all pay about the same thing. Moreover, one would never base a choice of fund on yield alone.
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Do you own any of these T-Bills ETFs?
I’ve had SGOV for quite while. Just wondering if it makes a difference at what point in the month to sell it. At the peak or after the distribution but stock drops in price?
@@couldbe8348 Doesn't matter. As you noted, its share price rises every day during the month leading up to the distribution and then drops.
Have sgov. Will probably migrate to xhlf with contributions going forward and reinvest distributions of SGOV into xhlf as well.
Even though it’s minuscule I’d like to capture LTCG with the price for SGOV still where possible. It’s probably not worth my time to try to squeeze this level of tax efficiency/fee differential but I also have the time and view this like solving a crossword puzzle.
@@maybefull Thanks for sharing!
Love the comparison chart at the end!
I'm glad!
Been holding sgov for awhile now. Love it
Thanks for sharing!
Thanks for the video, very informative.
I own Boxx, coupled with AAA and SPHY for a combined trio of nice diversification, growth and dividends.
Thanks for sharing!
awesome info thx. i hold sgov for my cash reserves and tried my luck with TLT (i know it is not Tbills) but considering getting out of TLT and maybe go with BOXX
Thanks for sharing!
When I get a round tuit, I'd like to compare their Price charts. One reason I like SGOV and TFLO is their very low volatility. Sure, the price has gradually increased as interest rates increased and people re-invested distributions. When rates decrease, I expect the NAV to gradually decline, however it won't plummet like long duration bonds. I wouldn't call them "cash" because the price can vary, but they don't have dramatic day-to-day fluctuation. When I need a _cash equivalent_ in my M1 Finance pie, the relatively steady, low volatility SGOV and TFLO work for me.
If rates drop, we'd expect long bonds to jump up, not "plummet."
Been using SGOV as my HYSA account. Does the job.
Thanks for sharing!
Thanks for the video ! I have a question for you guys (if any want to add 2 cents) -
Im not in the USA nor Im a USA citizen, but I do have a brokerage account in the USA where I can trade ETF's. Considering the possible escalation of a war between Russia and OTAN and looking at market movers like Buffet selling stakes in Apple to buy T-bills, I wonder if its time to be on the safe side and sell my QQQ and VOO Etfs and rest in treasuries for awhile. Question : Is there any difference between investing in ETF's like BIL or SGOV compared to buying the T-bills themselves ? I mean in a world crisis scenario are these ETF's less safe than holding the T-bills themselves ? Thanks if any would give an opinion.
Not much difference other than the obvious fee of the ETF. If the ETF - or its provider - failed for some strange reason, you'd still own the bonds inside it. Bond ETFs are just baskets of individual bonds.
@@OptimizedPortfolio Thanks!
I will check those out.
Thanks for watching!
Excellent video as normal I think I will go with XHLF because it’s the cheapest one and they all similar basically
Thanks for watching!
John, with Fed cuts likely coming in the back half of this year…..would be curious to get your thoughts on migrating short term t-bill assets to longer duration bonds. Thx
I don't try to time interest rate changes or the bond market.
@@user-tm1kb3fq4m Time horizon, volatility, asset allocation.
I divorced SGOV after seeing the tax benefits of BOXX. Now with potentially falling interest rates, I'm rotating that money back into equities and long term bonds
Thanks for sharing!
How does USFS compare?
Not seeing that anywhere.
@@OptimizedPortfolio Sorry USFR.
@@jenniferw8963 ua-cam.com/video/Wh7X0XRlry8/v-deo.html
BOXX in taxable accounts, SGOV in 401k
Thanks for sharing!
For how long can I hold cash into SGOV? Like one year or more? Because I don't need the cash any time soon. Thanks
As long as you want.
@@OptimizedPortfolio Thank youuu. So, what does it mean 1-3 months? Please explain to me John..
When the bonds mature.
@OptimizedPortfolio Thanks, John. I'm sorry, but what does it mean mature for bonds or for investors? I appreciate your answer.
@@ww313ww Maturity is the life of a bond. For a simplistic hypothetical example, if you buy a 1-year bond with a face value of $1,000 and a coupon rate of 5%, it will pay $50 (5% * 1000) over that year (monthly payments of $4.17) and then you'll get the principal back at 1 year, at which time you'd have $1,050. We'd say your return was 5%.
T-bills don't match up with that example perfectly because they don't actually pay interest; they are sold at a discount and the difference between that price and the face value is the imputed "interest," but the point is T-bills are bonds with maturities less than 1 year.
So a 3-month T-bill will mature in 3 months. If its annualized yield is 5%, its implied interest would be that same $4.17 per month but for only 3 months. If it has a face value, it would be sold at a discount of about $987.50 (1000 - 4.17*3). These ETFs I mentioned here buy and sell those T-bills for you so that you don't have to, and they pay out that effective "interest" monthly.
Because T-bills have such short maturities, their yield will rise and fall quickly with interest rates.
I actually have a video coming tomorrow that explains how T-bills work.
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Right
You need to start including yield, as it making decision process easy
Yield on these changes week to week, and since they're all T-bills, they all pay about the same thing. Moreover, one would never base a choice of fund on yield alone.