Nuff said . But get before Friday . Nah Thursday .........

Highest 10 year yield since August of 2007. Boys and girls do you remember what happened soon after that ??????

Stocks went on sale,!!!!

Sale just started!! Even at clearance prices the are about 16% over valued.

I'm good with a 50% drop and will buy more aggressively when everyone else is running. I have plenty of time to ride out the dip.

Honestly I don't know how bonds work. Used to buy some at the bank but I think it's all on line now and rated go up and down not fixed. So makes it hard for me to be interested.

Money that's I put in the market I look at as money that's been spent and don't worry about the bad years. It's not a loss if you don't sell and it always rebounds. Now when I get closer to retirement I will want something more stable.

I do have 20 k sitting in the bank I need to put into something I can get access to but makes some return. But that's just my emergency fund and I don't want it all locked down. Been thinking about laddering short term cds.

PF that’s the way you’re in it for the long term you’re not spending it tomorrow. I’m sitting tight until my pension and 401 k gets rolled to my advisor after the first of the year

I have been buying cd’s the past year. Average around 5.25 %

To me buying bonds right now says you trust the Government with your money. Some how that looks like a loosing deal to me.

PF there are several different types of US treasury issues.

What you are describing is an IBond, it fluctuates with the inflation rate.

Jbyrd is referencing a ten year note. It has a fixed rate.

White 17 can explain the difference between Tnotes, Tbills and Tbonds, how rates are determined, how to buy and possibly sell far better than I can.

MJM sums up my feelings about long term US government debt securities.

I would love if someone broke down the process of how buying t-bonds-notes-bills works. I tried to register for Treasury Direct but they said I need a notary public to do so.

It appears you can buy them through brokerage firms such as etrade but I'm not sure how that works either.

And if I understand it right, on the treasury direct site you need to bid for them at auction?? How do you know what to bid?

I set up an account on treasury direct ( 4 actually) . No notary needed. Took about 10 minutes to set up buy and was done . It walks you through it. Once the account is set up you put in information about the account you want to transfer monies from.
No 49er yesterday I was pointing out the 2 year rates. But all were up. Financial person I spoke with said rumor are this might be ugly by thanksgiving. And really ugly by February. Didn’t ask what was driving his thinking. Because I don’t care ! Let it burn .......

Sorry about the misunderstanding J. We have been in an inverted yield for some time it typically doesn't end well.

No doubt there is a lot going on, it's going to get interesting.

I have no idea what's keep us from great depression or worse economy and have been expecting it for the last year or two. Definitely should have hit long before now. Got tire of waiting and increased the 401 contributions a few months ago and used what was going in the boys brokerage accounts monthly by 20%. When I pick back up working more ot in Dec (if it's available) I will bump both once again.

Angela: You may indeed need to fill out a hard copy application and have it notarized. It is because the Treasury website doesn't recognize some rural addresses. I had to do the same thing when I opened mine. It took about six weeks to get approved,which was faster than they originally said.
I encourage you to complete that process.

Yes you can buy bills, notes, bonds through a brokerage but you will pay a fee to do so. Different brokers will have different fee schedules. There are no fees with Treasury direct.


General comment about bonds: The current interest rates really are interesting and are finally positive after a couple of decades.

If they interest you, be sure you answer some questions for yourself.

Do I want to own these instruments to generate current income or am I looking for capital appreciation in the future ?

How long before I might need this money ?

Do I live in a state with an income tax ?

What do I believe is going to happen with interest rates next month or next year. Higher or lower ?

What is going to happen to the economy ? Fuel prices, government debt, inflation levels, government dysfunction ( shut down, default, re-rating of US credit in the global market ?)

Do I understand the difference between buying & owning bills, notes, bonds directly as opposed to buying into a bond mutual fund ? (very important distinction)

Would I be better off in a money market account or a CD ?


That all might sound like a lot to consider but everyone has a gut feeling and an opinion. At least ask your self those questions even if you can't answer all of them. Answering some of them should help you decide what is best in your individual situation............and there are no wrong answers to those questions

Thank you Ken.

I was considering starting a thread on this subject. Care to humor me?.

Can you recommend any books regarding the bond market?

We have had several good discussions regarding iBonds so we could skip that vehicle. There are 3 other types of government securities, bills, notes and bonds.

Let's start with Tbills. Could you give the cliff note version what a tbill is, how rates or prices is determined. Subject to state and local taxes?

T- Bills

A lot of information I posted earlier here.
*
https://trapperman.com/forum/ubbthreads.php/topics/7937355/re-treasury-bills#Post7937355
*
Once you have it set up it is easy to reinvest Bill, you can set reinvestments up to 6 times.
Never Buy a T-bill from a Bank or investment firm .. the rates they charge you are crazy.
T-Bills are free from state tax on the interest.
When you start to buy T-Bills stagger them, so when the Fed increases the rate you catch it on the next reinvestment.
Nturally when the Fed Rate goes down Bill rates go down also. You can easily cancel future reinvestments if you have to.
This is a personal thing but I only buy 90 days or fewer Bills, some I have are 4 weeks.
I have been at this for over 50 years and have made as much as 16% on a 90 day T-Bill, that was the highest rate ever.
Every Monday I get an email what the Auction rates were that day.
Someone mentioned Bids, Always put "Non-competitive bid" and then you get the average of bids.
For short-term investing it sure beats CD's, there are some CD's that pay more but are long term, 1 year or more.
*
Make some quick $$$, I lowered my bank savings down to what I can get buy with. If I need money I can always cancel a reinvestment and
when that bill is due the money flows back into my bank account. If I forget to reinvest it comes back also.
*
Do it, Make yourself some $$, baloney with the Bank and their low rates.
*

Well first of all I am by no means any expert. I have been in the stock market since 1961 but it is surprising just what a large influence the bond market has on stock prices. Consequently, I have picked up a smattering of information on bonds simply by osmosis.

First one thing I forgot in responding to Angela but that Trapper Ed did mention.
We retail investors are NON-COMPETITIVE. We are not bidding on anything. That is an activity left to those organizations that are designated as Primary Dealers in treasury securities.......such as Goldman Sachs, JP MOrgan, Citi Bank, Bank of America et al. Their bids actually set the rates at wich we can also invest in treasuries.

As far as books go.........I honestly have never read one on the bond market but I do know there is the usual Bonds For Dummies as there is on almost every subject.

Basically, treasuries are debt certificates of the federal government. The buyer , us, enters a contract with the US Treasury and that contract specifies a face value of the loan we are making to the Treasury, and for a precise time period to maturity, and a specific return on our loan expressed as an annualized percentage. The difference among bills, notes, bonds is just one or time to maturity.

Tbills are anything less than 52 weeks. Tnotes are 2-10 years and Tbonds are everything over 10 years.

The interest on each of them is paid a bit differently but that's about the extent of it.

Here are a couple of links that might be helpful. The Treasury Direct link has some 2 minute videos that are clunky running but informative



https://www.treasurydirect.gov/indiv/tools-videos/basics-of-t-bills-t-notes-and-t-bonds/


https://www.youtube.com/watch?v=P2tpRnDO_U0



Then there is the whole other world of corporate debt that gets more complicated, a bit riskier but also more rewarding.....potentially. But it's probably best to stick with one subject at a time

Charles Schwab has an attractive short term CD rate.

Every time I ever invested in a bond mutual fund, I lost money. A cycle of rising interest rates will do that.

If you're willing to hold the actual bonds--either Treasury or private bonds--until they mature, they should pay the coupon rate without losing principle. So long as you didn't buy a bond from a failing company.

Jim

Yes, CDs are an attractive alternative to bonds.

Charles Schwab, Fidelity, Vanguard, T. Rowe Price all offer brokerage accounts with low- or no-fee trades in bonds, stocks, and mutual funds. I've tried the others, and found that Fidelity has provided the best service.

Jim