Yes but they don't pile up paper currency on your behalf. It's going to be in Money Market assets not Treasuries, not FDIC bank deposits, and they keep the interest... Like Schwab.jalanlong wrote: ↑Wed Mar 25, 2020 8:52 pmI don’t believe so. I use M1 Finance as my broker. Any uninvested cash just sits in the account. I looked and it offers no interest. I don’t believe they sweep cash to any fund.
Negative 1 and 3 Month Treasury Rates
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Re: Negative 1 and 3 Month Treasury Rates
Re: Negative 1 and 3 Month Treasury Rates
What do I care what they are doing with my uninvested funds? Of course they could fail, that is a risk. My thoughts are that if I put $100 in an ETF like Bill or GBIL, I may very likely end up with $99 at the end of the month or year with negative short term rates. But my $100 uninvested is still $100 assuming the brokerage doesn't fail and SIPC insurance cannot cover it.ochotona wrote: ↑Thu Mar 26, 2020 7:27 amYes but they don't pile up paper currency on your behalf. It's going to be in Money Market assets not Treasuries, not FDIC bank deposits, and they keep the interest... Like Schwab.jalanlong wrote: ↑Wed Mar 25, 2020 8:52 pmI don’t believe so. I use M1 Finance as my broker. Any uninvested cash just sits in the account. I looked and it offers no interest. I don’t believe they sweep cash to any fund.
Re: Negative 1 and 3 Month Treasury Rates
Seconded. I got caught up in this debacle at Schwab in 2008. It was promoted as a safe, cash-like alternative. I even wrote checks off of it! Wow, did I feel brilliant. Until I got stabbed.MangoMan wrote: ↑Thu Mar 26, 2020 8:23 amDo yourself a favor and buy a treasury only money fund with the idle cash. I had some cash at a broker in 2008 where the sweep fund was the Reserve Fund. The broker didn't fail, but Reserve did. It took months to get access to the money and I got something like 80 cents on the dollar with no interest.
As you might have heard, the largest bond fund at Charles Schwab (Nasdaq: SCHW), YieldPlus, is plunging in price. Suffering from massive redemptions, of the vast majority of its assets, it was forced to sell illiquid mortgage-backed securities at distressed fire-sale prices. As a result, the fund cratered from $8.79 at the end of February to $7.17 at the end of March - a fall of more than 18% in one month - and is now trading at just $6.85. That's a really nasty year-to-date loss of 24% for an ultrashort bond fund which opened the year at $9.01 a share.
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Re: Negative 1 and 3 Month Treasury Rates
I assume that is from 2008?ochotona wrote: ↑Thu Mar 26, 2020 8:31 amSeconded. I got caught up in this debacle at Schwab in 2008. It was promoted as a safe, cash-like alternative. I even wrote checks off of it! Wow, did I feel brilliant. Until I got stabbed.MangoMan wrote: ↑Thu Mar 26, 2020 8:23 amDo yourself a favor and buy a treasury only money fund with the idle cash. I had some cash at a broker in 2008 where the sweep fund was the Reserve Fund. The broker didn't fail, but Reserve did. It took months to get access to the money and I got something like 80 cents on the dollar with no interest.
As you might have heard, the largest bond fund at Charles Schwab (Nasdaq: SCHW), YieldPlus, is plunging in price. Suffering from massive redemptions, of the vast majority of its assets, it was forced to sell illiquid mortgage-backed securities at distressed fire-sale prices. As a result, the fund cratered from $8.79 at the end of February to $7.17 at the end of March - a fall of more than 18% in one month - and is now trading at just $6.85. That's a really nasty year-to-date loss of 24% for an ultrashort bond fund which opened the year at $9.01 a share.
Re: Negative 1 and 3 Month Treasury Rates
So you think that the risk of a broker failing is worth losing money on negative interest rates? M1 does not have a MM fund so I would have to use a treasury ETF. Right now I am using GBIL which is a cheaper version of SHV.ochotona wrote: ↑Thu Mar 26, 2020 8:31 amSeconded. I got caught up in this debacle at Schwab in 2008. It was promoted as a safe, cash-like alternative. I even wrote checks off of it! Wow, did I feel brilliant. Until I got stabbed.MangoMan wrote: ↑Thu Mar 26, 2020 8:23 amDo yourself a favor and buy a treasury only money fund with the idle cash. I had some cash at a broker in 2008 where the sweep fund was the Reserve Fund. The broker didn't fail, but Reserve did. It took months to get access to the money and I got something like 80 cents on the dollar with no interest.
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Re: Negative 1 and 3 Month Treasury Rates
How much money are we talking about? Hundreds, thousands, tens of thousands?jalanlong wrote: ↑Thu Mar 26, 2020 8:49 amSo you think that the risk of a broker failing is worth losing money on negative interest rates? M1 does not have a MM fund so I would have to use a treasury ETF. Right now I am using GBIL which is a cheaper version of SHV.ochotona wrote: ↑Thu Mar 26, 2020 8:31 amSeconded. I got caught up in this debacle at Schwab in 2008. It was promoted as a safe, cash-like alternative. I even wrote checks off of it! Wow, did I feel brilliant. Until I got stabbed.MangoMan wrote: ↑Thu Mar 26, 2020 8:23 amDo yourself a favor and buy a treasury only money fund with the idle cash. I had some cash at a broker in 2008 where the sweep fund was the Reserve Fund. The broker didn't fail, but Reserve did. It took months to get access to the money and I got something like 80 cents on the dollar with no interest.
Re: Negative 1 and 3 Month Treasury Rates
Jalanlong have you bought I-Bonds this year yet?
https://www.treasurydirect.gov/indiv/re ... ibonds.htm
https://www.treasurydirect.gov/indiv/re ... ibonds.htm
Re: Negative 1 and 3 Month Treasury Rates
Now would be a great time to start an I-bond ladder.
The yield on the I-bond will be 2.22% until 1 May 2020.
Get 'em while they are red-hot!
The yield on the I-bond will be 2.22% until 1 May 2020.
Get 'em while they are red-hot!
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Negative 1 and 3 Month Treasury Rates
i had reserve fund ..we lost 3% if i remember but it was locked for months. i luckily only had 35 bucks in it .MangoMan wrote: ↑Thu Mar 26, 2020 8:23 amDo yourself a favor and buy a treasury only money fund with the idle cash. I had some cash at a broker in 2008 where the sweep fund was the Reserve Fund. The broker didn't fail, but Reserve did. It took months to get access to the money and I got something like 80 cents on the dollar with no interest.jalanlong wrote: ↑Thu Mar 26, 2020 8:00 amWhat do I care what they are doing with my uninvested funds? Of course they could fail, that is a risk. My thoughts are that if I put $100 in an ETF like Bill or GBIL, I may very likely end up with $99 at the end of the month or year with negative short term rates. But my $100 uninvested is still $100 assuming the brokerage doesn't fail and SIPC insurance cannot cover it.ochotona wrote: ↑Thu Mar 26, 2020 7:27 amYes but they don't pile up paper currency on your behalf. It's going to be in Money Market assets not Treasuries, not FDIC bank deposits, and they keep the interest... Like Schwab.jalanlong wrote: ↑Wed Mar 25, 2020 8:52 pmI don’t believe so. I use M1 Finance as my broker. Any uninvested cash just sits in the account. I looked and it offers no interest. I don’t believe they sweep cash to any fund.
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Re: Negative 1 and 3 Month Treasury Rates
1 month rate is begging to go negative again soon but this time without the initial virus fear.
https://www.treasury.gov/resource-cente ... data=yield
We started the year at .09. The last two weeks it has been bouncing between .02 and .01.
https://www.treasury.gov/resource-cente ... data=yield
We started the year at .09. The last two weeks it has been bouncing between .02 and .01.
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Re: Negative 1 and 3 Month Treasury Rates
Fund families are keeping the money markets positive by waiving expenses ....you may be better off in them then say something like bil
Re: Negative 1 and 3 Month Treasury Rates
I noticed that my cash ETF GBILL hasn’t paid interest all year since the .09% expense ratio outweighs treasury bill returns at the moment. SHV hasn’t paid anything out this year either.mathjak107 wrote: ↑Fri Apr 02, 2021 5:56 amFund families are keeping the money markets positive by waiving expenses ....you may be better off in them then say something like bil
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Re: Negative 1 and 3 Month Treasury Rates
My fdlxx has been paying under a buck on 6 figures in cash .
But at least the fund families seem to be waiving the expenses while etfs are not
But at least the fund families seem to be waiving the expenses while etfs are not
Re: Negative 1 and 3 Month Treasury Rates
The HBPP prescribes a Treasury money market fund for safety and liquidity, not yield. Chasing yield in cash is not necessary and can potentially lead to problems with safety and liquidity at the moment that you can least afford it.
BTW, the nominal yield of a 1 year Treasury zero stands at -0.01% today. Real yields of STTs have been negative for some time now. I note, in passing, that low Treasury yields have not stopped Warrant Buffet from piling up his stash of Treasurys estimated at more than $100 billion. He does not hold high-yield bonds, muni bonds, bank-sponsored repos, or currency swaps. Do you wonder why that is?
BTW, the nominal yield of a 1 year Treasury zero stands at -0.01% today. Real yields of STTs have been negative for some time now. I note, in passing, that low Treasury yields have not stopped Warrant Buffet from piling up his stash of Treasurys estimated at more than $100 billion. He does not hold high-yield bonds, muni bonds, bank-sponsored repos, or currency swaps. Do you wonder why that is?
Last edited by jhogue on Wed Apr 07, 2021 5:04 pm, edited 1 time in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Negative 1 and 3 Month Treasury Rates
They both are treasuries only one is loosing money in the etf as no expenses seem to be waived
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Re: Negative 1 and 3 Month Treasury Rates
I do.jhogue wrote: ↑Wed Apr 07, 2021 5:03 pmThe HBPP prescribes a Treasury money market fund for safety and liquidity, not yield. Chasing yield in cash is not necessary and can potentially lead to problems with safety and liquidity at the moment that you can least afford it.
BTW, the nominal yield of a 1 year Treasury zero stands at -0.01% today. Real yields of STTs have been negative for some time now. I note, in passing, that low Treasury yields have not stopped Warrant Buffet from piling up his stash of Treasurys estimated at more than $100 billion. He does not hold high-yield bonds, muni bonds, bank-sponsored repos, or currency swaps. Do you wonder why that is?
Re: Negative 1 and 3 Month Treasury Rates
I think it is quite simple: Buffett is more concerned with the return of his money than he is with the return on his money. In other words, safety and liquidity must come before yield.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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Re: Negative 1 and 3 Month Treasury Rates
He made so many poor buys and subsequent sales you have to wonder if that is true...he has underperformed a simple S&P fund for 15 years which gas no individual company risk either
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Re: Negative 1 and 3 Month Treasury Rates
https://www.treasury.gov/resource-cente ... data=yield
1, 2 and 3 month all .01 last two days. Closer and closer to 0.
1, 2 and 3 month all .01 last two days. Closer and closer to 0.
Re: Negative 1 and 3 Month Treasury Rates
He's been doing well recently and overperformingmathjak107 wrote: ↑Fri Apr 23, 2021 5:56 pmHe made so many poor buys and subsequent sales you have to wonder if that is true...he has underperformed a simple S&P fund for 15 years which gas no individual company risk either
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Re: Negative 1 and 3 Month Treasury Rates
It only took him 15 years to get lucky again
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Re: Negative 1 and 3 Month Treasury Rates
Very slowly churning lower.
Appears 1 month did go negative for moment today.
https://www.marketwatch.com/investing/b ... trycode=bx
Appears 1 month did go negative for moment today.
https://www.marketwatch.com/investing/b ... trycode=bx
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Re: Negative 1 and 3 Month Treasury Rates
1 month bill is staying negative and I bet it will close negative today.
I can't imagine a treasury money market fund won't start passing this along to fund holders now.
Do they have method in place to not break the buck?
I can't imagine a treasury money market fund won't start passing this along to fund holders now.
Do they have method in place to not break the buck?
Re: Negative 1 and 3 Month Treasury Rates
Maybe they'll close the fund to new investors to limit the number of new T-bill purchases, hold the NAV at $1, and increase the fund's ER to offset the negative rate?