No. of Recommendations: 0
" I see that the rate for the 28-day has now been posted at 4.550%, which is down a bunch of beeps from last week's 4.630%, which was anomalously high. The temporary flood of tax receipts coming into the Treasury should depress the rate for the 28-day bill to more "normal" levels. But once the gov't chews through that money, I expect the 28-day to regain ground.

This is useful information. Thanks. Vickifool"


What I wrote, and what you quoted, wasn't information. It was merely opinion. I'm guessing. I don't follow the Treasury market closely. I don't know the factors that control the 28-day rate as opposed to the 91- and 182-day rates. I'm guessing, just trying to explain to myself why the 28-day rate seems to behave differently than the other two when data sets are compared, such as yield-curve charts of all three over a two-year time frame. The 28-day makes occasional moves that seem independent of its longer-period peers. In short, I'm just a chartist looking for a fundamental explanation of why the chart is as it is.

I made the briefest attempt to game the moves and then decided:

(1) I couldn't do it
(2) it wasn't worth the money to be gained even if I could achieve a "normal" win/loss ratio, because I had no easy way to protect my downside.

So my response has been to stick with my investment plan of building ladders on an equally-weighted basis. (I don't vary the number of bills I buy each weeek in an effort to catch occasional surprises such as last week's permiumum offerred by the 28-week.) The reason for the premium interests me, and I'm willing to intellectaul speculate about its cause and reappearnce, but I'm not willing to speculatate on my speculations (aka, bet money), because the grief if I'm wrong outweighs the possible gains. I make plenty of bets and take plenty of risks. But gaming T-Bills isn't one of them. I'm using the instrument as a "safe harbor", and I need to adhere to that plan. (The big money in FI investing is to be made elsewhere.)

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.