TBLL
Invesco Short Term Treasury ETF
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Unless you want capital gains instead of a cash dividend, in which case you could choose from the following, depending on the time of month: TBLL SGOV USFR
Agreed. If interested in a few tickers which track Treasuries, have a look at these: SGOV TBLL USFR
I sold my Call Credit Spreads for a good 40% profit. Not going to reenter the market today as who knows what will happen over the weekend, parked my cash in TBLL
Is there any difference between SGOV & TBLL?
Serious answer: If you want to stay the stock market you can sell that and buy a low cost index fund. E.g. Buy VOO (you will get the returns of the S&P 500) If you want to get interest only e.g. treasury bills, buy a low fee bill fund - buy TBLL (~4% interest a year atm and safe) or other sensible money market funds - there are a lot
Trying to tell him to save money for when he's 70 is just silly. At 16, 54 years away may as well be 540 years away. Instead, make him do the right thing with at least half of his money. Open a custodial eTrade account, and put half his money in it. The other half goes in his piggy bank, custodial savings and checking, or whatever he wants. And keep a very simple spreadsheet of his "today Son" money and "tomorrow Son" money. Today money is money he keeps handy, and Tomorrow money is what's in the eTrade acct. that is a one-way trip for now, and not to be withdrawn from under ANY circumstances for at least 10 years (26 isn't as far away as 70, lol). Let him choose, within reason, how to invest some of his custodial account - FDMO & FDVV, VOO, SCHD, TBLL, VCIT, whatever, but make sure they're good, stable, mix some dividends with some growth, and maybe let him pick stocks of products he is familiar with, like Pepsi / Coke, or Colgate / P&G. Giving him some choice will give him a sense of ownership, rather than just something you're twisting his arm and making him do. Tell him something VERY VERY VERY important. This isn't the Star Trek universe, where stuff comes out of a replicator for free. You're going to start adult life working for money. That means YOU are a servant, and MONEY is your master. That's not good, but it's necessary to function in polite society. Your goal should be to turn the tables, where YOU are the master and MONEY is your servant - or, in other words, instead of working for money, your money is working for you! You can only get across that threshold by investing, and having assets that do that work of making your money make more money. And since you're not a billionaire, stacks of gold or acres of real estate isn't practical, but stocks and ETFs are. You can have him set goals, like, "my money makes so much money, it buys a meal out to eat once per month." The next goal might be "my money makes so much money, it's a car payment every month." But you keep adding to it, not taking away. By the time he's 30, he may actually be able to skim off the top for a meal out to eat every month, and the rest can continue to the grow the portfolio. Maybe by 35, it will be his car payment - again, leaving some of the D&I in to continue growing. And by then, he should be married, engaged with a career level job, and probably also have a 457 and/or 401k. And his regular portfolio is just another income source - a second job, but without having to work another 40 hours per week.
>The last 5 years have been some of the most brutal that bonds have every experienced. Depends on which one. Funds based on short term government bonds have done ok the last few years (SGOV, TBLL, etc). SPHY and some of the high interest bond funds have been alright too, when adjusted for total return. I-bonds have given fairly lucrative returns for a few years too.
SGOV is the shortest ultrashort bond fund, gives almost identical or better performance to a high yield savings account. I like TBLL better because the expense ratio is lower and the payout is slightly higher, but SGOV holds 0-3 month maturities and TBLL holds 1-12 month so it is just a little bit more rate sensitive.
Also SGOV or TBLL are very stable and pay consistent monthly interest
USFR pays well over a 5% divvy (based off their recent monthly dividends, not YTD), and is focused on short term treasuries. Same for TBLL. They can go up and down more rapidly than some others based on rate changes, but as long as you're paying attention it's not a bad option. If you go into corporate bonds (and don't mind some junk bonds), SPHY is around a 7.5% yield. The problem with all of them (short term bonds, HYSA, etc.) is they're sensitive to rate changes. As long as you're on the ball/flexible, you can respond quickly and enjoy the profits while they last.
What are the goals? Very low risk, just want cash? SGOV, TBLL Low risk, slightly better return? USFR. More risk, higher return? SPHY. If we are talking life savings, I'd do a mix; 30% SGOV/TBLL, 50+% USFR, 10-20% SPHY. If this is just trading money you are stashing feel free to be more risk-on. ...I am not a financial manager, do your own DD.
Thank you everyone for taking the time to respond. Great suggestions here, and instead of commenting on each, I am writing a general response to your suggestions, as to why I asked about what are my options: ​ ​ It is intimidating, because of how many options there are. Honestly, just my own demons to fight. Vanguard, Fideltiy, Schwab? how do I compare? or are they all the same and just pick one? Then, there are bonds, etfs, money markets, etc. In other words, I now understand t-bills, so how do I find a replica of t-bills - track yield of t-bills, principal is secure, can be cashed in around 5 days. and then, furthermore, am I limiting myself by focusing on t-bills? are there other options where principal is secure, tax exempt, and yield is better? A quick search gave me a long list: FDLXX FHQFX VFISX VUSXX SGOV TBLL BIL, BILS Information overload!