I only share in case....short term treasuries actually yield something these days - 1 months at 0.29% with 0.34% for 3 months. This is enough above typical MMF rates (TDA's at 0.01%) to think about, esp. the shorter duration. I been buying several including 2 week paper - sure you get all of $7 on a 100k investment (but $70 on 1m, and $350m for 5m), but it is $6.99 more than you get otherwise. Course, you want to be sure you won't need it (though selling if you must is easy enough but obviously if you do this then don't get involved in the first place cause there is a very small spread) and my broker for example takes a notable markup but still - free money otherwise. And not like CEF weekly auction notes where you have worry about liquidity and ultimately credit risk...so the only thing you have to compute is the time to buy it and track it...and frankly, it is safer than a MMF, esp. if you got a client above the insurance coverage...https://www.treasury.gov/resource-center/data-chart-center/i...
p.s.if you are fortunate enough to have somebody like Vanguard, don't bother (Prime has a 0.41% yield right now). It is only the crummy broker side where they rip you with 0.5% to 1% expense ratios on MM funds where this makes any sense - unless you just want treasuries...
Stupid question since I am not a money manager - why don't you buy directly from treasurydirect.gov? Is it really hard to move money between your brokerage and treasurydirect.gov?
*if not commingled, each account is a sub-account, so you'd have to have account for x number of clients along with transfer instructions too; in a brokerage account, you can do a single trade and then allocate it to, say, 100 different sub-accounts. Much quicker. The other is not feasible, esp. for the return you are getting.*as noted, you can buy shorter than 1 month in the brokerage (1 week if you want), and more importantly you can sell them in jiffy if need be (possibly at a loss, esp. if close to a buy). I'm not sure the logistics of selling, for example, a 4 week note in Treasury Direct. Point is you want a return, absolute liquidity, and absolute access. If it matters, I have a high yield savings account that pays more than 1%. Wish I could use that for all clients....but the logistics would be a nightmare so it would satisfy three criteria above.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |