I’m thinking of buying a few treasuries. Do you buy secondary market or during auctions? What banks do you use? How long have you been buying them? Anything else I should know?
Why do you want treasuries? Have you looked at ETFs?
How are ETFs an equivalent asset to treasuries?
They aren’t equivalent but they are easy to buy and sell. Hence the question.
Yes, I have looked at ETFs.
I guess I could also buy electronics - I hear those are pretty easy to sell on ebay
I had an account at Treasury Direct. There are certainly ETFs that will mimic a short-tern yield such as TBIL and SGOV. SGOV has the lower expense ratio and last month was yielding 4.18%. Of course if taxes are eating into this gain it becomes very unattractive.
My suggestion is BOXX. In the last 6 months is stock is up 2.06% so on track to possibly yield 4.17% thereabouts. But with no dividend payments if you can hold it a year or longer maybe you can avoid paying capital gains taxes or at the very least minimizing them.
If you’re looking for something longer term, I have bought a few longer term secondary treasuries and bond offerings easily on E*Trade, but sold off most of them. Just wasn’t interested in long duration, right or wrong.
Good luck!
I buy them on Schwab. You can search for treasuries fitting the specifics you want and buy it in secondary market.
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+1
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I get them from my buddy Jerome
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how’s he doing these days with the constant talk about him being fired
i’ve been buying high quality muni bonds to fulfill my “not equities” portion of my asset allocation. They seem to yield, net of tax, marginally better than treasuries. Tax brackets suck.
I’ve convinced myself that “not equities” should go into pre-tax IRAs/401ks due to tax and growth considerations
My work is making it painful to do anything but funds in the 401k. I see why they do that, but grrr
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I think this seems like a generally good idea.
I just want to buy a house within the next few years, so I need to generate/accumulate some post-tax cash. I could just use equities for this, but I’d be taking on market timing/fluctuation risk.
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Can’t you buy ETFs that hold treasuries?
I could, but they don’t behave the same way as buying treasuries. The reason is because I can time when I sell the treasuries to not lose money on them if rates go up. But ETFs can’t force people not to sell, so they suffer when rates go up more than I would.
Same with all bonds vs bond funds really. I have more confidence in my own ability not to sell before earning the fixed rate, than I have confidence that everyone else will do the same. And there’s really no incentive for people holding a fund to do this because they won’t benefit.
Have you been buying the bonds themselves or muni ETFs/funds?
No ETFs or funds. To get my interest state tax free in addition to fed tax free, I have to use munis in my state. I don’t know if all states tax munis this way, but mine does. I look for established school districts and stable suburban governments issuing bonds.
Schwab makes the search for (filtering) for this quite easy. What it doesn’t do (or I don’t know how to automate) is the automatic rolling over of bonds and/or interest when cash hits my account. So it takes some babysitting.
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I always thought that I was fighting the folks in the highest tax bracket for those, so the tax benefits for lil ole me weren’t enough.
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