37
votes
How Is There A Yield Curve For Treasuries?
The basic detail you're missing is that you can't redeem the bond for it's face/par value until maturity. If you buy the 30 year bond at 2.5% now, and in one year's time the rate for a new 29 year ...
- 30.2k
33
votes
Accepted
How Is There A Yield Curve For Treasuries?
There are some good answers already but I think it would help to walk through a concrete scenario under your implied hypothesis.
"Why buy a 1-year Treasury Bill at 1.25%, when I can buy a 30-year ...
- 43k
28
votes
Accepted
If US Treasuries at yielding 4-5% right now, why can't I find an ETF that yields that amount?
Over the last 12 months, SGOV yielded 1.84%, but the current SEC yield (30 days ending on the last day of last month) is 4.41%. If you want to know what a fund or ETF yielded most recently, look at ...
- 7,926
24
votes
Accepted
If Turkey doesn't go bankrupt, is there any chance they won't pay bonds profits?
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you ...
- 6,788
24
votes
Why does this 4-week Treasury bill that I bought have a 17-week term and a much earlier issue date?
Fidelity may have sold you a bill that expires 4 weeks from your order date instead of a newly minted bill. It is not uncommon to trade "off-the-run" treasury bills that have identical ...
- 142k
21
votes
Accepted
Why would someone buy bonds with yields comparable to US Treasury bonds?
Isn't it more rational to just buy US Treasure bonds if you can't earn a significantly higher yield from Corporate/Municipal bonds?
Say you're a large fund, like California's state pension fund. ...
- 3,820
21
votes
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Why does this 4-week Treasury bill that I bought have a 17-week term and a much earlier issue date?
The other answer is actually misleading. No, Fidelity didn't sell you off-the-run bills. What you got is indeed a newly issued T-bill. There's a term for this: reopening.
https://www.treasurydirect....
- 2,197
18
votes
Why would someone buy bonds with yields comparable to US Treasury bonds?
Munis are tax-advantaged, so you'll need to factor in your tax rate to convert the quoted yield to a tax-equivalent yield you can compare to taxable securities.
- 8,557
15
votes
Accepted
Do x-year treasuries become y-year treasuries (x-y) years later?
Yes, these are called "off-the-run" treasuries. Since they are not sold by the treasury directly but sold in secondary markets, they are less liquid than "on-the-run" treasuries ...
- 142k
15
votes
safe investment for maintaining purchasing power
One year is very short term in terms of investment horizons. Depending on your anticipated distribution/spending pattern, the most appropriate choice is likely either a high-yield savings account, CD, ...
- 9,553
13
votes
Accepted
TreasuryDirect.gov not showing monthly interest gained on an I bond
They don't include the interest for the last 3 months until the holding period requirements are met. So you'll start seeing interest accruals in 3 months. After 5 years of holding they'll add the last ...
- 185k
13
votes
Why would someone buy bonds with yields comparable to US Treasury bonds?
First: who said anyone is buying? If something is available for sale, it doesn't necessarily mean someone is buying.
Second, and more important:
A lot of investors and funds work based on a pre-...
- 185k
12
votes
If US Treasuries at yielding 4-5% right now, why can't I find an ETF that yields that amount?
The average yield to maturity of SGOV is 4.41%. The 2% is the 12-month trailing yield. From https://www.ishares.com/us/products/314116/ishares-0-3-month-treasury-bond-etf:
Note that the average yield ...
- 11.5k
10
votes
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Financing kids' college with bonds
Could I buy 10 year treasuries?
Sure
Would that be a good choice?
Well it would be safe (meaning you would definitely get exactly the yield you bought into) but college costs have risen much more ...
- 142k
10
votes
How can the purchase cost of a treasury bill be more than its face value?
The discount is determined at the auction, no-one guarantees you the 5%. You may end up paying more than the face value if at the auction the discount becomes negative (i.e.: becomes a premium), which ...
- 185k
9
votes
Is there a catch in investing in treasuries close to maturity date?
The question seems to be whether you can benefit from the (normally) higher yield of a longer-term bond but limit your risk by buying it close to maturity. The answer is you cannot, because you have ...
- 30.3k
8
votes
safe investment for maintaining purchasing power
You can certainly buy US federal inflation-protected bonds directly from the government. See https://www.treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/ . Note that the interest rate ...
- 51.6k
7
votes
How do I cash my stimulus check if I have lost my ID and have no bank account?
You will need to obtain a new photo ID. You can check with your new state’s DMV office to see what the requirements are and how you can meet them. They may or may not accept the photocopies you have. ...
- 116k
7
votes
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If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, does my profit be $100?
Profit is sales price - cost - expenses. So yes, if you bought something for $1000 and sold it for $1,100 your profit is $100, assuming no transaction fees.
It is irrelevant if you are buying and ...
- 53.5k
7
votes
How Is There A Yield Curve For Treasuries?
You cannot count on a crisis (specifically a deflationary crisis) happening just when you want to liquidate. If you need to sell a long-term bond (before maturity) during unexpectedly strong economic ...
- 30.3k
7
votes
Why wouldn't a broker let a retail investor choose the order type when purchasing Treasury bills via auctions?
Brokers do allow that, just not through their self-service. If you want to place a competitive bid - call the bond desk.
Retail investors do not buy treasuries in any volume large enough for the ...
- 185k
6
votes
Accepted
How can I track TreasuryDirect savings bonds with Mint?
Unfortunately, Mint cannot connect with TreasuryDirect to track savings bonds. But, you can manually add the value of the bonds as "other property" in Mint and update it manually on a monthly basis (...
- 943
6
votes
Accepted
Why is there a discrepancy between current inflation rate and I bond rate in the US?
The "inflation rate" for the i-bond is based on the past 6 months of CPI values, not a whole year.
- 142k
5
votes
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Are there market makers in bonds market?
Bonds are not traded on an exchange like stocks, and so there are no "designated" market makers like for stocks, but there are some brokers that will buy and re-sell bonds to keep liquidity ...
- 142k
5
votes
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Why would anyone buy an old treasury while it is regularly auctioned during the year?
Because the price will change to so that the yield is "fair" (according to market expectations) and people want to use their money for other things now rather than waiting for the next ...
- 28.3k
5
votes
Accepted
Treasury Yields -- Quoted on an Investment Basis vs. Discount Basis
The convention for US treasury bills is discount yield. Constant maturity series (CMS) are not actual treasury yields but a computed construct that has always a set maturity (1 year for example). ...
- 2,987
5
votes
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Why people are contrary to the cancellation of treasury shares with no reduction of share capital?
Treasury shares can be resold providing additional funding for the company. If they're retired, a new issuance of shares will require additional shareholder voting.
- 185k
4
votes
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Are T-Bills "coupon equivalent" rates based in annual terms?
Annualizing offers a simpler way to compare 1 mo, 6 mo, and 1 yr treasuries. "Do I want to invest for 6 months to get 1%/yr or a year to get 1.1%?" That kind of choice.
4
votes
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Comparison of Mortgage Rate vs 10 Year Treasury Rate
The tax-deductibility of interest is a piece of the puzzle, but not "the" reason to not pre-pay.
I highly recommend you read another question here, Oversimplify it for me: the correct order of ...
4
votes
Accepted
Treasury Expected Yield vs. Reality Difference
The ~2.4% you are expecting for the 4 week T-Bill is the annual rate, or the rate for 52 weeks. Therefore 2.4% divided by 13 will get you ~0.185% for the four weeks you .
In fact If you go one click ...
- 145k
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