I've been buying a rolling 6 month T Bill ladder since sometime last year. Considering extending the duration out to around 2 years. If you're buying T Bills, what's your duration right now?
With no state tax and cash being a pretty small part of my allocation, my focus is much more on accessibility vs yields. I am ok with taking the yield hit but have the flexibility of an Ally 4.15% MMA with checking options, so no T bills for me
To be honest, the 1% extra is probably only yielding me around $500/yr, but I have learned a lot more about fixed income over the last year than I've learned while rates were low.
I've never been in the position to have to decide when/if to extend the duration of my bonds, hence the original question. My gut is saying that sometime this year I should extend to around 2 years duration and that by next year rates might start going down. But of course I don't know nothing!
9 replies
Since this isn't automated and I didn't see one yet, decided to take the initiative!
Thank you for keeping it alive!
We’re going to have a lot of ATHs on spreadsheet day.
I'm very much looking forward to it!
I've been buying a rolling 6 month T Bill ladder since sometime last year. Considering extending the duration out to around 2 years. If you're buying T Bills, what's your duration right now?
What’s the delta between T bill rates and a money market fund like SPAXX or similar? Just curious… I’ve never looked into it.
Here’s the most recent T Bill rates: https://www.treasurydirect.gov/auctions/announcements-data-results/
The last 26 week rate was 5.381%
SPAXX 7 day yield is 4.75%
T Bills are also state tax exempt, CA 9.3% bracket, which makes the T Bills more like 5.88%
With no state tax and cash being a pretty small part of my allocation, my focus is much more on accessibility vs yields. I am ok with taking the yield hit but have the flexibility of an Ally 4.15% MMA with checking options, so no T bills for me
To be honest, the 1% extra is probably only yielding me around $500/yr, but I have learned a lot more about fixed income over the last year than I've learned while rates were low.
I've never been in the position to have to decide when/if to extend the duration of my bonds, hence the original question. My gut is saying that sometime this year I should extend to around 2 years duration and that by next year rates might start going down. But of course I don't know nothing!