SCHQ
Schwab Long-Term U.S. Treasury ETF
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Should I start buying treasury ETF now?
Having trouble deciding between short vs long term treasuries
What is the implied advice in this analyst's bullish tweet (about bonds)?
Best approach to Bond ETFs / Funds, currently? (Lost 12% so far & trying to understand what I need to know in the future)
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Have you considered SCHQ?
My best performers for the last two weeks have been VXUS and SCHQ that cant be good
A lot of redditors are left minded and rude and toxic. Absolutely right the world's economy is in shambles and moving over to SCHQ is a good option.
Right now you should put 300k in SCHQ, while the world starts to burn with civil unrest as you will start to see. After that back to qqq or spy or VGT. Cycle that again in 8-16 years.
If I was in your shoes I would max out my employer-sponsored retirement accounts every year. I would then get a high-deductible health plan and max out an HSA every year. I would also max out either a traditional or Roth IRA every year (Roth is better for most people). I would primarily invest in international stock ETFs like VXUS, and in bond ETFs like SCHQ and BNDX.
Thanks, SCHQ, SPTL or just bonds? it's just for a week.
Well, I can tell you what I use. But I don't think you actually _do_ care about that - you want to know what _you_ should use. And since we are different people with different situations, it would be intellectually lazy of me to just jump to the end, and not helpful (and being helpful is why I'm here). If you insist though: portfolio: - 85: # equity - 60: # US - 85: SCHB # broad - 15: AVUV # small cap value tilt - 40: # international - 75: # developed ex-US - 85: SCHF # broad - 15: AVDV # small cap value tilt - 25: # emerging - 85: SCHE # broad - 15: AVES # value tilt - 15: # bonds - 100: SCHQ # long-term treasuries
Just another suggestion… I’d increase your international equity position, decrease bitcoin, and exchange the short term bond fund for a long term bond fund. Something like this: 45% VOO 40% VXUS 5% BTC 10% SCHQ
I use an ETF despite the fee because I don’t want to manage my collection of Treasuries myself. SCHQ, SCHO, and SCHR.
My SCHQ is up almost 4% ytd. lol ess in pee
>If the market does experiences a major crash the next few years but is expected to recover significantly after Trump's term, what three stocks would you go all in on and why? VT and SCHQ, because something in the market is going to do well but we can't say what, and because longterm treasuries correlate reasonably well against stocks in the meantime.
Buying treasuries is somewhat tax advantaged (no state tax). I find it simpler to be able to have that return in my brokerage account without having a separate hysa. You can buy treasures directly or just buy a safe ETF like SGOV with returns similar to an hysa. Just be aware that going with long term treasuries comes with volatility (you can see this by how much SCHQ dropped since long term rates started rising in September).
Treasuries can either be bought new at auction, or on the secondary market. If you buy them new, there's a whole process where periodically the government puts up a bond for sale and everybody bids and collectively the bids determine the price. It's not straightforward. If you buy on the secondary market, you're buying bonds that someone else has and is selling. Your broker has access to some amount of the market for that (it's not centralized like stocks are) and will give you a way to search across them. You'll have to decide what you want out of all the options. Both of these are annoying to deal with, which is why most people buy bond funds instead. I put in a stock buy for SCHQ, it executes, now i own treasuries. I-bonds are separate from treasuries, and operate differently than any other bonds that I'm aware of. First, you can buy them at any time and there's no fixed number of them in existence; but you can only buy $10k a year. You can't sell them. They build interest and after the first year you can cash them out whenever you want. I-bonds have two components. There is a fixed rate that is set at the time of purchase. And there is the current rate that they are making, which is determined by adding the current inflation rate to the fixed rate. If you buy an i-bond today it will always return 1.2% over inflation. The variable rate is adjusted every six months. Once a month your i-bond gets interest (so you have additional money you can withdraw). It only compounds every six months however, so every six months all the interest is added into the amount that interest is calculated off of.
I should qualify for FAFSA, so here’s hoping there’s not much out of pocket cost for college. Not really planning on buying a house, at least anytime soon. I really never gave much thought to my future, so kind of still figuring those things out. Ive got two baskets, kind of just to try things out, but those positions would be: SCHB, SCHG, SCHD, SCHQ VIG, VGLT, VTI, VUG Do you think I’m maybe playing it a bit safe for my age? I guess given how much time I have for it to grow, I could tolerate a greater level of risk? Sorry for the uncertainty, I kind of took a break from this stuff to focus on other things and then the inheritance came into picture so I wanted to get a plan going.
Other than AMZN and WMT shares, the entire rest of my IRA port has been moved to TLT and SCHQ. Both 100% guaranteed to go up. 50-pt cut would be a moonshot for bond ETFs
* SPTM (like VTI but the S&P large, mid and small for profitability filters and liquidity) * AVUV small value and quality filters * FNDF International Fundamental (Value and Quality) * SCHQ (long term treasuries, but with a little shorter duration than TLT and a little cheaper) NOTE! The duration is because you specifically said in 20's so easily have a long time horizon to reallocate during market dips (Out of bond which will go up and into stocks).
Absolutely not - you should not wait. If you are really worried about the market (understandably!) then buy bond funds. Bonds have pretty much bottomed out because of high interest rates. All indicators point to interest rate cuts starting this year and continuing from there. This makes funds like SCHQ and BLV extremely safe bets. They will go up in value as interest rates go down and in the meantime earn decent dividends to reinvest.
10-year dead. SCHQ straight to Venus
IBTO is a dated bond fund.. (Dec 2033) TLT is always 20-year bonds fund. they sell less dated maturities to buy longer dated maturities so this is not a long term hold as opposed to IBTO which should reach to its full value by maturity (dec 2033) TLT is not marginable for 30 days which is why I play with SCHQ, TLT has more liquidity and the options are also liquid. no options on SCHQ. TLT exp ratio 0.15%, SCHQ 0.03%
Everytime they cut rates is because they had to due to serious economic catastrophes which increases the demand in guaranteed assets, treasury bonds. I am long in SCHQ
Looks like SCHQ is a bit longer duration ones I chose TLT because it’s something I am familiar with Also has good liquidity to sell covered call against I assume it will have similar exposure to this very strategy.
I briefly looked into this and also saw Schwab’s SCHQ, which tracks long term treasuries as well, but has a higher dividend yield and significantly lower expense ratio. What gives TLT the advantage in your book? I’m not up to date on my boomer-type investments so curious about your thoughts.
From google search: *What is the price change in a bond given a 1% change in interest rates?* *As a general rule, for every 1% increase or decrease in interest rates, a bond's price will change approximately 1% in the opposite direction for every year of duration. For example, if a bond has a duration of 5 years, and interest rates increase by 1%, the bond's price will decline by approximately 5%.* If you have a 30 year bond and rates go up 1% the value of the bond will drop about 30% (this is why the funds are down now). If you hold the bond for 30 years you continue to get interest and then the principal at maturity. Similarly if rates drop 1% the 30 year bonds value goes up 30%. But what if you need cash and rates have dropped 1% and you have to sell the bond at a 30% loss? Bonds have risks and sometimes people assume bonds == safety. Long bonds are riskier. Buy a bond for the duration you are in it for. So if you are in 10-20 years a long bond fund might be good. (The bond fund prospectus will list its duration.) Also, the rates are not "sky high" relative to historical norms. The last 15 years, or so, have been an aberration. [https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart](https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart) Personally, I am taking advantage of the rates and building a treasury T-Note ladder to fund my first 5 years of retirement with plan to hold those til maturity (but for may case that duration is 7 years and under). And I also own a growing (but small) position in SCHQ (long bond fund Schwab) which is down 15% since I started averaging in to it over the past 11 months.
>After the last FOMC meeting, the 25-year treasury ETFs like ZROZ and SCHQ are at their lowest since 2013. >My question is when is a good time to buy treasury ETFs in order to make profits by the rate cuts. You're comparing things on the complete opposite end of the yield curve. The fed rates are overnight borrowing rates. The funds you mentioned are 20+ year rates. Those are heavily correlated with long term inflation expectations, NOT the fed funds rate
This is a “ learning moment “ I also unfortunately went through. Experts have long advise the “110 Rule” , where you should have 110 minus your age in stocks. For OP’s mother at 72, she was pretty close to that number. In hindsight, last year when we first heard about inflation concerns we should have dumped all our bonds, but I didn’t. Last half of 2022 was a rare case where bonds and stocks both fell together. I know that if you wait until full term of the bond, you get your money back. I know the value of bond funds dropped because interest rates rose. I don’t understand how bonds maturing in a fund, like SCHQ, affect the fund price. It seems that as bonds mature, there should be a bump in the value of the fund. Regardless, I’m holding my bond fund positions. At least there is a regular payout while we wait for fund prices to recover. This is mostly due to me concern that the market is near a top, and if so, stocks will fall, interest rates drop, and bond funds recover.
In the past 3 months I've bought the long bond (SCHQ), DE, CAT, JPM, UNVGY, MAR, KR. All looked reasonable to me on forward earnings and forward free cash flow basis.
I like SCHQ and IGLB myself, treasury and corporate both 10+ years for a little more rate exposure and price action
SCHQ and IGLB but exploring others like LQDB which are lower grade than those two
VFINX (or SWPPX if you have a Schwab account), VUSTX (or SCHQ) long term treasuries, VGSH (SCHO), SCHP.
Bond ETFs are down because the bonds they hold are down the exact same amount. SCHQ holds long term bonds which are very volatile and sensitive to changes in yield. With inflation recently hitting 40 year highs and the Fed starting to aggressively hike interest rates, bonds have risen in yield, or equivalently fallen in price. If you are down 18% on SCHQ, it probably had positive return since inception when you bought it. The best diversifier for a mostly stock portfolio in recent crises has been long term treasuries. Investment grade corporate and even more so junk bonds have higher yields but are more correlated with stocks so they tend to fall the same time stocks do. Treasuries sometimes act a safe haven when liquidity is in high demand like during the Covid shutdowns and the global financial crisis. But they, and all intermediate/long term nominal bonds generally, fare poorly during rising inflation because their payoffs are fixed in nominal terms and won't rise when inflation does, meaning they need to fall in price to deliver sufficient real yields for new buyers in the market. Inflation linked bonds like TIPS fare better since their face value automatically increases with higher inflation. But they tend not to do as well in recessionary crises because they are less liquid and recessions tend to be deflationary.
Best way to take advantage of bonds? Let's say I want bonds in my portfolio, for diversification purposes. What's the best way to do that? It seems like bond ETFs would not be the best way. The bond ETF I purchased is down around 18% so far, and in fact the lifetime returns are negative (SCHQ). Not sure how I missed that when I first purchased it. And in fact, looking at most bond ETFs, the returns are mostly negative . So... it seems like turning bonds into a stock-like product is not actually providing the stability that an actual bond does? So, it would seem that the best way to diversify with bonds would be actual bonds, no? So that leads to the follow up question: What are the best bonds to purchase right now, in terms of hedging a portfolio? 2-year treasury, 10-year treasury, corporate, junk bonds, other...? I'm on a mission to understand bonds (after having lost so much money on them so far) .... or just give up on them and move on to other hedging/diversification strategies. I'm a newbie, so I appreciate all helpful advice and comments. EDIT: I mean apart from i Bonds, which I've already purchased the max of this year. EDIT #2: I also know that we are in a bond bear market. That's actually why I'm interested in purchasing bonds now. It seems like they would be selling at a discount.
>I purchased SCHQ (Schwab's bond ETF), in September 2021, thinking I was "hedging" against the stock market, since that's what bonds do, right? Long term treasury bonds have had some nice anticorrelation to stocks in recent crises. However, over the longer term they have averaged zero correlation to stocks. This makes them a good diversifier, not quite a reliable hedge. >Clearly I was not really educated enough about bonds, bond funds, and bond etfs. It's gone down 12% since then. Well stocks are not down that much, so this doesn't contradict being a crisis hedge. >- What should I have looked at, back in 2021, to determine if investing in a bond ETF would have been a good move at the time? Boglehead-wise, you would not have looked at anything other than historical diversification. Markets are relatively efficient; the best strategy is to construct a diversified portfolio with positive risk premium up to the level of risk you are willing to bear. Long term treasury bonds might be a component of that. Furthermore, given the experience of the last 40 years of falling yields and tepid inflation, and the negative rate experience of other developed countries, it's not that crazy to keep holding US treasurys at any low but positive yield. With that said, 30yr treasury bond yields were quite low last year: https://fred.stlouisfed.org/series/DGS30, ~1.9% in september. There's not a ton of upside at that yield, and, at least with the benefit of hindsight, more downside as yields normalize to pre-pandemic levels. If you are going to start making macro plays on bonds, yield would be only the smallest first step. You would want to start predicting inflation and economic growth and the Fed better than the market. >- When is it better to invest in a bond ETF/fund vs just a bond? ETFs are simpler to buy and hold as part of a portfolio. Most ETFs keep a constant duration, and they are available in smaller denominations. If you want to guarantee a particular value on a particular date, then you want a single bond (or a portfolio of bonds with the same maturity or a target maturity bond fund). >- What are the best ways to invest in bonds, as a portfolio hedge? (Corporate bonds, long term bonds, short term bonds, ETFs, etc?) SCHQ >What would you do if you currently owned SCHQ and it was down 12%? Would you just hold? Sell now before it goes lower? Hold; maybe rebalance a little into it if it's my normal rebalancing time and it's underweight. >Is NOW a great time to be purchasing MORE of bonds or bond ETFs, since the prices are so low? Prices are lower than a year ago (equivalently, yields are higher). But they are still not that high compared to pre-pandemic, and inflation is currently significantly higher than pre-pandemic (while 10yr inflation expectations are not nearly as high as this year inflation, they are higher than pre-pandemic). So I would not say bond prices are truly low. I think it makes sense to start easing into bonds if you are currently underweight but I personally wouldn't overweight them now.
I buy SCHQ and SCHR when I want to buy bonds.