Anybody Buying Yet? Where’s the Bottom?

[Mountain Man]

Agree. In additions, iBonds are just a pain in the ass- I wouldn’t do it for that amount.

The 1.3% is fixed for the life of the bond while a second portion adjusts along with inflation every 6 months. The current total for the first 6 months of bonds purchased through the end of April is 5.27%.

The fixed amount of 1.3% is the highest I bonds have been in a very long time.

To the OP, Ibonds can certainly serve as an emergency fund after the initial 12 month lock out period. You lose 3 months of interest if you sell before 5 years. It only takes a few days to process a sale so it is easily accessible after 12 months.

 

[Treeshark]

Thanks for clarifying, MM- that makes way more sense why you would be considering them now.

Still a no-go for me, way too big of a pain in the rear for me to consider again.

 

[westbranch]

SPAXX or similar are nice for the yield + a chunk being state income tax free for emergency funds.

 

[brymoore]

I had my parents place some money in IBonds when the rate was in the 9s. It’s been a good investment for them so far.

 

[grizzly_]

Don't you want emergency funds in something without an early redemption penalty?

This is the proverbial "money under the mattress" fund. Cash has lost nearly half it's value since 2000 and I don't want to have to be chasing CDs every 6-12 months for the next 30 years just to stay up with inflation. Plus, it's only tied up for 12 months, and the 3 month penalty is gone after 5 years.

I'm thinking that with the 1.3% fixed, plus the variable (currently equaling 5.27%) that I may acquire ibonds for the next little bit to build it up and then forget about it.

It would be my "oh sh!t" fund that will do better than a checking account or mattress, but I won't have to actively manage it just trying to beat inflation like I would with a CD (which also would tie it up for a term and thus may not be the best for an emergency fund).

I'm primarily wondering people's thoughts on the current fixed rate (the highest in nearly 20 years) verse what it may reset to in three weeks.

 

[Brittany Chukarman]

You could do a T bill ladder with bills maturing every month. Currently paying 5+%.

 

[rogerthat]

This is the proverbial "money under the mattress" fund. Cash has lost nearly half it's value since 2000 and I don't want to have to be chasing CDs every 6-12 months for the next 30 years just to stay up with inflation. Plus, it's only tied up for 12 months, and the 3 month penalty is gone after 5 years.

I'm thinking that with the 1.3% fixed, plus the variable (currently equaling 5.27%) that I may acquire ibonds for the next little bit to build it up and then forget about it.

It would be my "oh sh!t" fund that will do better than a checking account or mattress, but I won't have to actively manage it just trying to beat inflation like I would with a CD (which also would tie it up for a term and thus may not be the best for an emergency fund).

I'm primarily wondering people's thoughts on the current fixed rate (the highest in nearly 20 years) verse what it may reset to in three weeks.

I’m sure you know this but you can only purchase $10k in ibonds per calendar year. There are some gift bond tricks to capture a great rate but generally that’s the rule

 

[grizzly_]

The 1.3% is fixed for the life of the bond while a second portion adjusts along with inflation every 6 months. The current total for the first 6 months of bonds purchased through the end of April is 5.27%.

The fixed amount of 1.3% is the highest I bonds have been in a very long time.

To the OP, Ibonds can certainly serve as an emergency fund after the initial 12 month lock out period. You lose 3 months of interest if you sell before 5 years. It only takes a few days to process a sale so it is easily accessible after 12 months.

Any thoughts on what the fixed rate will be next month? I don't know enough about how the rate is established to know how it will compare to the current rate.

Where I intend it to be a long-term hold, I feel like the fixed rate is more important to me than the variable rate.

 

[SAJ-99]

This is the proverbial "money under the mattress" fund. Cash has lost nearly half it's value since 2000 and I don't want to have to be chasing CDs every 6-12 months for the next 30 years just to stay up with inflation. Plus, it's only tied up for 12 months, and the 3 month penalty is gone after 5 years.

I'm thinking that with the 1.3% fixed, plus the variable (currently equaling 5.27%) that I may acquire ibonds for the next little bit to build it up and then forget about it.

It would be my "oh sh!t" fund that will do better than a checking account or mattress, but I won't have to actively manage it just trying to beat inflation like I would with a CD (which also would tie it up for a term and thus may not be the best for an emergency fund).

I'm primarily wondering people's thoughts on the current fixed rate (the highest in nearly 20 years) verse what it may reset to in three weeks.

I get it. Just make sure you are not thinking this through properly. I'm with @Treeshark. These are a PITA to purchase so I avoid them. Just assume that markets are efficient, so there should be no material advantage between purchasing a 20yr TIP or an Ibond. Feb 30yr TIPS auction had a 2.125% fixed portion.

I have always thought there were better options than Ibonds, especially in in this period of click a button and buy/sell and see the funds T+1. ETFs like TBIL, or bond series ETFs like IBIC or IBID have a clearer risk exposure. And there is always just plain treasuries. But I am probably more willing to take risks and earn the higher return than most people.

Edit: Deleted some inaccurate info. Ibonds are locked at purchase. So there is some duration risk on the real rate.

 

[Mountain Man]

Any thoughts on what the fixed rate will be next month? I don't know enough about how the rate is established to know how it will compare to the current rate.

Where I intend it to be a long-term hold, I feel like the fixed rate is more important to me than the variable rate.

I don’t think many people on this earth really know how the fixed rate is going to change after the end of the month. It’s hard to not jump on the highest rate in 20 years. At the same time, the Fed hasn’t dropped the prime rate yet so why would it go down? I honestly don’t know.

One possible approach is to buy $5K this month and $5K next month to cover both options.

 

[brymoore]

I don’t think many people on this earth really know how the fixed rate is going to change after the end of the month. It’s hard to not jump on the highest rate in 20 years. At the same time, the Fed hasn’t dropped the prime rate yet so why would it go down? I honestly don’t know.

One possible approach is to buy $5K this month and $5K next month to cover both options.

Swap markets are pricing two Fed rate drops now but there is rumblings of no rate drops this year. Beginning of the year swap markets had priced in 6 rate drops this year. Of course, this could all change with the next round of economic reports.

 

[SAJ-99]

I don’t think many people on this earth really know how the fixed rate is going to change after the end of the month. It’s hard to not jump on the highest rate in 20 years. At the same time, the Fed hasn’t dropped the prime rate yet so why would it go down? I honestly don’t know.

One possible approach is to buy $5K this month and $5K next month to cover both options.

Correct, they don't tell you. But you can make an educated guess. @grizzly_ can watch this (I am not associated with this organization). The approach to the I bond fixed rate seems pretty reasonable. However, we still have 3 weeks of trading left.

 

[howl]

https://tipswatch.com/ does a good enough job explaining that stuff that I feel like I can understand. The problem I have with I bonds is where they're held and how taxed. Tips and agency bonds within a Roth are worth considering.

 

[SAJ-99]

https://tipswatch.com/ does a good enough job explaining that stuff that I feel like I can understand. The problem I have with I bonds is where they're held and how taxed. Tips and agency bonds within a Roth are worth considering.

Problem is it was his emergency fund.

 

[Brittany Chukarman]

March CPI report comes out in a few days. See how it effects the bond market.

 

[Deleted member 28227]

Don't you want emergency funds in something without an early redemption penalty?

You can get 5.15% in a savings account right now... not sure why do you do anything else with "emergency funds"

 

[Wind Gypsy]

You can get 5.15% in a savings account right now... not sure why do you do anything else with "emergency funds"

Yep. I bought ibonds when rates were way up including with the tax $5k tax return option. I cashed out recently because the rates were lower than what I can get in a savings account.

 

[schmalts]

Yep. I bought ibonds when rates were way up including with the tax $5k tax return option. I cashed out recently because the rates were lower than what I can get in a savings account.

Just make sure to consider the ibond growth is tax free, savings account is taxable. I almost cashed mine in but figured since tax free ill wait a bit longer. But yeah they are a pain in the ass. I closed the savings account I had used when I bought them because I found a bank with a much higher rate, and to update bank info required me to fill out 5 pages and have the bank stamp them and send to treasury. What a crock. No way to cash out until I did all that

 

[antelopedundee]

This is the proverbial "money under the mattress" fund. Cash has lost nearly half it's value since 2000 and I don't want to have to be chasing CDs every 6-12 months for the next 30 years just to stay up with inflation. Plus, it's only tied up for 12 months, and the 3 month penalty is gone after 5 years.

I'm thinking that with the 1.3% fixed, plus the variable (currently equaling 5.27%) that I may acquire ibonds for the next little bit to build it up and then forget about it.

It would be my "oh sh!t" fund that will do better than a checking account or mattress, but I won't have to actively manage it just trying to beat inflation like I would with a CD (which also would tie it up for a term and thus may not be the best for an emergency fund).

I'm primarily wondering people's thoughts on the current fixed rate (the highest in nearly 20 years) verse what it may reset to in three weeks.

Interest rates aren't going to drop like a rock so if you have a large amount of cash drawing 5% or so after the first decrease you may want to look for a vehicle to lock in current rates for the next few years at least. I have one IRA where the interest earned approximately equals the RMD. For me it would be better if rates went up instead of down.

 

[Sytes]

"And while some people will say, hey, let your winners run. That's not always prudent. I don't agree with that saying necessarily. I think we have let them run. And I think it's now time to take those profits and not overstay our welcome.

RS: And does that go for all the tech stocks that you're invested in?

JA: I would say that goes for probably 90% of them. Some of them I do see will have, like smaller corrections. A lot of my investing philosophy does revolve around technical chart analysis. So that kind of helps me gauge what kind of depth or what kind of rally, what kind of extensions we'll see. And a lot of them – some of them, so for instance, you have the Intels of the world. They really haven't moved into all-time highs. Over the last several quarters, they've been struggling."

https://seekingalpha.com/article/4683737-ai-tiers-and-taking-profits-in-tech-with-joe-albano-tech-cache?mailingid=35044336&messageid=must_reads&serial=35044336.566358&utm_campaign=email_mr%3Aevergreen_lp_premium_test_eligible_feb2024%2B2024-04-15&utm_content=seeking_alpha&utm_medium=email&utm_source=seeking_alpha&utm_term=must_reads_free_eligible

******

Regarding AI, this is an interesting perspective. I'm not involved in Joe's investment group though have followed him over the years...

Not sure I would say 90% though I do agree a pullback, consolidation, correction phase has to be nearing maybe 50-60%? Hobby player guess over a full time guru.

I'm going to pull my Alphabet (GOOG) and spread it out. Coming up on earnings and feel Joe's sentiment.
***So if you're looking for a power win, naked buy option for the upcoming GOOG is likely going to smash expectations w/ an amazing outlook!

Thoughts for good stock start ups in the AI, battery/renewables/O&G, Biotech, etc?

Renewables: I've played DFLI and fell hook, line, and sinker for their battery ideas. Held onto for sake it would be bought out or balloon.
I don't want to talk about just five or so years ago day trading NVDA @ $17 roughly and AMD. UGH! The whales that are now.
Don't want to think of SENS...

Game to hear thoughts. Little guppies looking to inflate?