no_free_lunch Posted May 4, 2023 Share Posted May 4, 2023 Are there any similar suggestions for those of us in canada? I can get 4.7% from a 1 year GIC but it's a ways off from this I bond deal. Link to comment Share on other sites More sharing options...
gfp Posted May 4, 2023 Share Posted May 4, 2023 1 hour ago, no_free_lunch said: Are there any similar suggestions for those of us in canada? I can get 4.7% from a 1 year GIC but it's a ways off from this I bond deal. Sounds like your 4.7% is actually better than the current "I bond deal." Link to comment Share on other sites More sharing options...
no_free_lunch Posted May 5, 2023 Share Posted May 5, 2023 (edited) Right, thanks for the update. I don't follow the i-bond myself, just tried to repurpose the thread. One more general portfolio question, for anyone who might be reading. I am moving to a 60/40 stock/bond mix and live in Canada. I am thinking of investing the 40% fixed income in Canada (easier and don't have to worry about currency), and investing the 60% stocks into US equities. There are still risks but this seems a decent balance. I am just hoping someone will tell me if this seems like a really bad idea. Edited May 5, 2023 by no_free_lunch Link to comment Share on other sites More sharing options...
changegonnacome Posted May 5, 2023 Share Posted May 5, 2023 US T Bills expiring June 13th ~5.4% YTM....... because of default nonsense MMF's don't wanna hold em.....can't beat getting more than Fed funds right now for something that is effectively better than 40 day CD Link to comment Share on other sites More sharing options...
no_free_lunch Posted May 5, 2023 Share Posted May 5, 2023 The t-bill idea is a good one. Thanks. In my case I have to figure out if I am allowed to buy it but great for Americans for sure. The yield you listed is actually higher than some corporate bonds. Link to comment Share on other sites More sharing options...
RedLion Posted May 5, 2023 Share Posted May 5, 2023 6 hours ago, no_free_lunch said: The t-bill idea is a good one. Thanks. In my case I have to figure out if I am allowed to buy it but great for Americans for sure. The yield you listed is actually higher than some corporate bonds. You can certainly buy T bills they’re just short duration sovereign bonds. Perhaps not the I bonds or other savings bonds. Link to comment Share on other sites More sharing options...
longterminvestor Posted May 15, 2023 Share Posted May 15, 2023 For those who bought IBonds in 2021-2022, the fixed portion of the coupon was 0.00%. IBonds are now being issued with a 0.90% fixed component to the rate. Curious if it makes sense to redeem the ones I have with and buy new with fixed component. Return on these has been satisfactory. Link to comment Share on other sites More sharing options...
Guest Posted May 15, 2023 Share Posted May 15, 2023 41 minutes ago, longterminvestor said: For those who bought IBonds in 2021-2022, the fixed portion of the coupon was 0.00%. IBonds are now being issued with a 0.90% fixed component to the rate. Curious if it makes sense to redeem the ones I have with and buy new with fixed component. Return on these has been satisfactory. I mean, if you are just comparing the 2021 to the bonds now, yes, it makes a ton of sense if you are planning on holding long term. It doesn't make a whole lot of sense if you think you can do better than 4.30% (before taxes). Link to comment Share on other sites More sharing options...
sleepydragon Posted May 15, 2023 Share Posted May 15, 2023 1 hour ago, longterminvestor said: For those who bought IBonds in 2021-2022, the fixed portion of the coupon was 0.00%. IBonds are now being issued with a 0.90% fixed component to the rate. Curious if it makes sense to redeem the ones I have with and buy new with fixed component. Return on these has been satisfactory. I think you lose a few months of interest if redeem within 5 years. So you may want to wait for another few months. Link to comment Share on other sites More sharing options...
longterminvestor Posted May 15, 2023 Share Posted May 15, 2023 Confirmed you lose 3 months of interest if you redeem inside 5yrs of purchase. That is playing into my math. Just not something I look at often and was curious if others had done similar calc. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted May 15, 2023 Share Posted May 15, 2023 2 hours ago, longterminvestor said: For those who bought IBonds in 2021-2022, the fixed portion of the coupon was 0.00%. IBonds are now being issued with a 0.90% fixed component to the rate. Curious if it makes sense to redeem the ones I have with and buy new with fixed component. Return on these has been satisfactory. Losing 3 months interest, liquidity locked up for an extra 1-year, and future resets looking less favorable are the major considerations. If you plan to hold long-term, it's worthwhile to get the extra 0.9% every year. For me, this was always an intermediate holding for the income and lack of price risk that intended to sell when resets were less attractive - as they're becoming. Link to comment Share on other sites More sharing options...
RedLion Posted May 15, 2023 Share Posted May 15, 2023 TIPS have to be considered as an alternative at this point I think. Just checking the yields right now, and it looks like you can get about 1.3-1.6% real yield on 5-30 year TIPS. If you want to just ladder these for the long term, I think adding long duration recently issued TIPS makes a lot of sense. If rates go back down you're going to make money on this trade as the real yield drops even if inflation is cooling off at the same time, but fundamentally if you're thinking of holding to maturity, this is a little but superior to I bonds paying 0.9. I'm also thinking of allocating some T-bill cash towards short duration TIPS. Link to comment Share on other sites More sharing options...
longterminvestor Posted May 21, 2023 Share Posted May 21, 2023 Found this on Treasury Direct. Pretty nicely presented. i-bond-rate-chart.pdf Link to comment Share on other sites More sharing options...
Gamecock-YT Posted September 3, 2023 Share Posted September 3, 2023 Time to start cashing these out. June/December purchases sell now. July/January October 1st. I'll probably move them to short term t-bills Link to comment Share on other sites More sharing options...
RedLion Posted September 4, 2023 Share Posted September 4, 2023 I cashed all of mine out last month raising capital for real estate deals. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 4, 2023 Share Posted September 4, 2023 Yea. I've got the slug of my 2022 purchases to liquidate in the next 2-3 months when the interest in giving up is ~1% that accrued. Have already rolled all of my 2021 purchases into JSCP in various tax free and tax deferred accounts to double the YTM without any tax drag. Link to comment Share on other sites More sharing options...
tede02 Posted October 31, 2023 Share Posted October 31, 2023 Repriced today with a 1.3% fixed rate. TIPS still seem better at what amounts to a 2.5% "fixed" rate (ie real yield) on longer maturities. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted October 31, 2023 Share Posted October 31, 2023 (edited) 2 hours ago, tede02 said: Repriced today with a 1.3% fixed rate. TIPS still seem better at what amounts to a 2.5% "fixed" rate (ie real yield) on longer maturities. Yup. iBonds were attractive in a world of zero-to-low yields given their price insensitivity and their floating-rates. Now that TIPS/bonds have largely repriced and iBonds outperformed significantly over the last 2 years, I expect the reverse will be true going forward: You're going to want the price sensitivity and the additional compensation for that risk. Edited October 31, 2023 by TwoCitiesCapital Link to comment Share on other sites More sharing options...
crs223 Posted October 31, 2023 Share Posted October 31, 2023 Why does the govt limit how many iBonds we can buy, but not how many TIPS we can buy? Link to comment Share on other sites More sharing options...
flesh Posted October 31, 2023 Share Posted October 31, 2023 Just skimmed this last page... isnt ibkr paying me 4.82 on cash right now? Simple? Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted October 31, 2023 Share Posted October 31, 2023 (edited) 3 hours ago, crs223 said: Why does the govt limit how many iBonds we can buy, but not how many TIPS we can buy? TIPS come to the market via dealers. You're buying secondary after the dealers take it down from the gov't. So the government isn't really impacted by your demand or not - it's the demand of dealers that matters and the government has control over the amount issued. As far as limiting iBonds, I'm not sure why the limit was set @ 10k, but I can understand why they don't allow an unlimited amount seeing as they're the ones committing to pay the floating interest and should have some control over how much they borrow. Edited October 31, 2023 by TwoCitiesCapital Link to comment Share on other sites More sharing options...
Gamecock-YT Posted November 1, 2023 Share Posted November 1, 2023 The tax deferred nature of the ibonds is why there is the limit I would guess Link to comment Share on other sites More sharing options...
ValueMaven Posted November 1, 2023 Share Posted November 1, 2023 I view i bonds as forced savings and retirement $$ ... I max out everything, 401K, HSA, and even do my employers ESPP which has a -15% discount at time of purchase. For the past 5 years I've been allocating to i Bonds on 1/1 of the new year. Not everything in life is about squeezing out the last 100bps ... at least for me anyhow. VM! Link to comment Share on other sites More sharing options...
crs223 Posted November 1, 2023 Share Posted November 1, 2023 1 hour ago, ValueMaven said: I view i bonds as forced savings and retirement $$ ... I max out everything, 401K, HSA, and even do my employers ESPP which has a -15% discount at time of purchase. Me too. I'm lucky, my company makes a huge 401k contribution so I can go to the higher "total" limit. I just "ASSume" that maxing out the iBonds is a good thing to do because it is limited... but perhaps I'm diluting myself and should be buying JOE instead like everyone else (ha!)... we think of the iBonds as our emergency fund. Link to comment Share on other sites More sharing options...
thepupil Posted November 1, 2023 Share Posted November 1, 2023 13 minutes ago, crs223 said: Me too. I'm lucky, my company makes a huge 401k contribution so I can go to the higher "total" limit. I just "ASSume" that maxing out the iBonds is a good thing to do because it is limited... but perhaps I'm diluting myself and should be buying JOE instead like everyone else (ha!)... we think of the iBonds as our emergency fund. impressive! I thought my company's contribution was good, but you got me beat! Link to comment Share on other sites More sharing options...
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