relaxbuddy
New member
I’m new to fixed income and conservative investing in general. Lately been weighin on different t-bill ladder strategies. The goal is to employ my capital in a safe heaven and wait out this current ridiculous pump on a thin air – then do some decent shopping in 24’.
I have to stay as flexible/liquid as possible since: a) the further down the line, the more likely are good deals to appear on the market; b) I’m in the Eurozone so will flip EUR once USD pumps considerably during the potential crash; c) short-term yields likely to grow further to 6-8% since no cuts (provided there’s no black swan) till 24’
Correct me if I’m wrong but very short mat. bills (2 week-2 month) seem to cater much better for these needs as opposed to longer ones? Fees are negligible ($5 for a trade on IB), so no problem rolling those over even weekly. They keep you liquid at virtually all times. Even in the event of a circuit breaker (and a subsequent rate cut/yield fall), chances are you’ll sell 2M above water way easier than 6M way before maturity, right? And then will be able to lock-in still high yield for longer once it’s already started declining.
On the other hand, am I right to assume I'll usually be able to sell even longer mat. bills for a profit way before maturity? Eg, I buy 6M, the yields keep on rising moderately and I want to sell in 1-2 months (to lock in higher yields or invest elsewhere). Is it likely I’ll I be above water by then or is it likely a moderate yield growth will have pushed my bills into a negative territory?
I have to stay as flexible/liquid as possible since: a) the further down the line, the more likely are good deals to appear on the market; b) I’m in the Eurozone so will flip EUR once USD pumps considerably during the potential crash; c) short-term yields likely to grow further to 6-8% since no cuts (provided there’s no black swan) till 24’
Correct me if I’m wrong but very short mat. bills (2 week-2 month) seem to cater much better for these needs as opposed to longer ones? Fees are negligible ($5 for a trade on IB), so no problem rolling those over even weekly. They keep you liquid at virtually all times. Even in the event of a circuit breaker (and a subsequent rate cut/yield fall), chances are you’ll sell 2M above water way easier than 6M way before maturity, right? And then will be able to lock-in still high yield for longer once it’s already started declining.
On the other hand, am I right to assume I'll usually be able to sell even longer mat. bills for a profit way before maturity? Eg, I buy 6M, the yields keep on rising moderately and I want to sell in 1-2 months (to lock in higher yields or invest elsewhere). Is it likely I’ll I be above water by then or is it likely a moderate yield growth will have pushed my bills into a negative territory?