patrick.net
An Antidote to Corporate Media
1,198,142 comments by 14,127 users - GNL, HeadSet, intrepidsoldier, Reality, The_Deplorable online now
invite response« First « Previous Comments 47 - 48 of 48 Search these comments
47
SunnyvaleCA
2023 Nov 12, 12:28am
ad says
I've been buying US treasuries that have 6 months to a year until maturity. They yield about the same as the CD. One difference is that US Treasuries are a very standardized thing, so you don't have to read the fine print, which is different for every different CD. For example, I know that I can sell my treasuries into an enormous market without issue, whereas a CD, if not held to maturity, may have penalties and fees.
If you buy treasuries directly from the government, you are probably more safe from financial catastrophe compared to the limits of FDIC and SPIC (or whatever it's called for stock broker insurance).
Schwab has 1 and 3 month CD's at around 5.4%. That beats inflation which is around 3.7%.
I've been buying US treasuries that have 6 months to a year until maturity. They yield about the same as the CD. One difference is that US Treasuries are a very standardized thing, so you don't have to read the fine print, which is different for every different CD. For example, I know that I can sell my treasuries into an enormous market without issue, whereas a CD, if not held to maturity, may have penalties and fees.
If you buy treasuries directly from the government, you are probably more safe from financial catastrophe compared to the limits of FDIC and SPIC (or whatever it's called for stock broker insurance).
48
EBGuy
2023 Nov 13, 3:35pm
ETrade, which was purchased by Morgan Stanley, is a total shittshow with their low yield sweep accounts (no MMA for you!). I've been putting extra cash in CLIP (which is an ETF composed of 1-3 month Treasuries). Easier than building your own bond ladder -- which you can't do with ETrade anyway as they don't have auto-roll. Perhaps we need a Treasuries thread...
« First « Previous Comments 47 - 48 of 48 Search these comments
I'm still confused about exactly how the Fed can push long-term interest rates lower.
From http://www.latimes.com/business/la-fi-petruno-20100925,0,6008425.column we have:
If the Fed prints up more dollars and lends them out to big banks at 1% interest long term, that does seem to force other lenders to lower interest rates to compete with the Fed. And it does seem to give retail lenders the ability to lower rates, because their own cost of money is lower if they can get it from the Fed.
But on the other hand, creating more dollars must lower the value of existing bonds, pushing their actual yields higher, not lower.
Which effect wins out?
#investing