VGSH
Vanguard Short-Term Treasury Index Fund ETF Shares
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Having trouble deciding between short vs long term treasuries
Are distributions from ETFs like VGSH that hold mainly government bonds exempt from taxes?
Have you found any ~1 year term investment products paying better than savings accounts right now?
Backtested a Volatility Strategy From an Academic Paper, Beat Market by 4x
Can anyone way smarter than me explain what is going on with the bond markets?
Backtested a Volatility Strategy From an Academic Paper, Beat Market by 4x
Why does the performance of Long Term Treasury Bonds vary more than Short Term Treasury Bonds?
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For a 3‑year, liquidity‑first plan, 67% in SGOV/VGSH fits the brief, but your equity sleeve is both tech‑heavy and overlapping with VTI (MSFT/GOOG/AVGO/AMD already dominate), so you could simplify to one broad fund or tilt a bit more defensive/dividend. Also sanity‑check duration and after‑tax yield against a simple Treasury ladder and set a rebalance rule; VGSH carries a little more rate risk than SGOV. I like to double‑check sector concentration and trend strength with a signals dashboard like Prospero AI, then make the call myself, no magic bullets, just a quick second opinion.
Are you going to receive one time $300k or it will be given to you every year? Same question about $100k from grandparents trust? If this is one time thing, then you can invest in stocks and bonds portfolio, preferably 50:50. For stocks you can just use VOO and VT. For bonds you can just use something like VGSH and VGIT.
The shift from the Intermediate-Term Bond Fund (BIV) to a Short-Term Bond Fund (BSV or VGSH) is advised because your primary goal for the bond sleeve is capital stability acting as "dry powder" ready to be deployed into stocks during a correction. During periods of rising interest rates or general market volatility (like the 2022 fixed-income correction), intermediate-term funds with a higher duration (like BIV) experience greater price declines than short-term funds, thereby reducing the stable value of your reserve capital. A short-term fund, while offering a slightly lower yield, drastically minimizes interest rate risk due to its low duration, making it a more reliable and less volatile source for your tactical rebalancing and a better fit for your goal of maintaining optionality/liquidity for a down payment in the coming years, despite the tax inefficiency shared by both nominal bond types in a taxable account.
It's very good to learn about investing and start investing. You have a lot to learn, as would be expected of someone 15. Read this and all of the links in it to get started leaning: [https://www.reddit.com/r/Bogleheads/comments/1l6j6tj/new\_to\_rbogleheads\_read\_this\_first/](https://www.reddit.com/r/Bogleheads/comments/1l6j6tj/new_to_rbogleheads_read_this_first/) Investing for the time of needing the money is a general principle of investing. VGSH is suitable for a 2-3 year time frame. Making money is good. Losing money is bad. Bond funds are somewhat complicated and don't work the same way as stocks. Judging VGSH as good or bad is based on the total return on investment. VGSH will pay dividends monthly. That is money made and return on investment. As a bond fund it will increase in share price after a dividend payment from interest the bonds it holds. The price will more or less gain up until the next dividend payment. After the dividend payment the share price will drop by the amount of the dividend. If when sell you fund shares at a price more or less than you paid for them you will have capital gain or loss that adds to or subtracts from the return on investment from the dividends. VGSH is a Treasury shortish term bond fund. Treasury bonds are backed by the full faith and credit of the government. It is pretty safe from loss. Longer term bonds and bond funds can have larger losses or gains with changes in the prevailing interest rate since the time the bond or bond fund was bought. VGSH currently yields 3.63% a year. Your $117 will make $4.25 a year more or less depending on how interest rates change over the year. Currently interest rates are expected to decrease over the next year, so probably less. This is not a get rich quick investment. If you hear it said that it takes money to make money this what what that means. Investing is an adult activity. It is up to you to do the adult thing and study and lean how to do it wisely.
I'm 16, new to investing. I was gonna buy SGOV but I was told to get VGSH since it's good to hold for the next 3 years. I'm confused, I bought $117 (2 shares) of VGSH, so if VGSH's price (which is $58) if it goes down, is that good for me since I wanna grow my money? And if it's up, it's bad right? But what if after 3 years it's time to sell but the ETF is negative? Do I still sell regardless since the 3 years are up?
Diversify out of individual meme stocks you read about on reddit and into low cost broad market index funds (i.e. VT). And keep any money for a house in something like U.S. Treasuries (VGIT/VGSH depending on when you plan on buying) and/or TIPS if unexpectedly high inflation would put the target out of reach (VTIP).
I have a somewhat different split with more gold (20%) and BRK (20%) with a lower QQQ and SPY allocation. Slightly lower risk portfolio can add some VGSH to take advantage of risk-off scenarios.
Yes, exactly. The shorter duration it is the less wild the swings, but they'll still be there. For instance, here is a graph of VGSH, Vanguard's short-term treasuries fund, over time: https://totalrealreturns.com/n/VGSH? You'll see that even with a short duration and with dividends reinvesting (which you don't get on price graphs), there's some ups and downs.
not true. i’m genuinely curious what others think. i was debating between buying BND and VGSH when near retirement if needed. if i wanted easy info i would’ve just asked chatgpt and been done. also hate and negativity is not good.
not true. i’m genuinely curious what others think. i was debating between BND and VGSH. if i wanted easy info i would’ve just asked chatgpt and been done. also hate and negativity is not good.
Hello, thank you for sharing your situation — first of all, I am sorry for the loss of your grandfather. It sounds like it left you on a very solid financial footing, and it's great that you're thinking long-term with money. Here are some ideas based on what you shared: ⸻ 🛡️ 1. Maintain flexibility (optionality) Since you plan to go back to school and might need that money to buy a house, you don't want to put it into something risky or something you can't easily withdraw. The simple fact that you are being cautious already puts you ahead of many people your age. ⸻ 🏡 2. If you need it in 3 to 5 years, the objective is to protect the capital, not to grow it too much Since you are thinking about using that money in the medium term, the most important thing is that it does not lose value. Some safe options: • High Yield Savings Account – super safe, and currently returns ~4–5% annually. • Treasury bonds or money market funds (for example VMFXX at Vanguard) – low risk, higher return than a bank. • Short-term bond ETFs – such as BIL or VGSH. They give a little more, but have some duration risk (interest). ⸻ 📊 3. Don't put everything in stocks with that money You already have good exposure to stocks (VOO, VUG, Nvidia, Apple), and that's great for the long term. But this inherited money should be treated differently, because if the market goes down just when you need that money, you could lose some of the value. ⸻ 🧾 4. Find out if that money has fiscal implications (taxes) It is worth confirming whether the inheritance is taxable. • If it comes from a regular investment account, you will probably receive what is called a “stepped-up basis,” which is very favorable. • If you are coming from an IRA or other tax-advantaged account, the rules change. It would be good to ask the executor or an accountant. It's worth it to stay calm. ⸻ 🎓 5. If you are going to study, save an emergency fund in cash If you're not going to work full time, it's a good idea to set aside 6 to 12 months of living expenses in a secure account (like a HYSA or money market). This gives you stability and prevents you from having to sell investments if there is volatility in the market. ⸻ ✅ Final thought: • You are in an excellent position: no debt, diversified portfolio and long-term mindset. • With that inherited money, the ideal is to prioritize security and flexibility. • Let your investments in VOO and VUG continue to grow in the long term, but protect short and medium term money from volatility.
If you’re going to pay less in taxes this year and have a Traditional IRA it might make sense to convert a portion of it to Roth IRA. If you have no need for that cash and can invest long term then go with a broad selection of ETFs since that is non-qualified money the ETFs will give you more tax efficient investing over mutual funds since they are required to distribute capital gains to you at the end of the year. As for your asset mix that’s based on time horizon and risk tolerance. For example if you’re in your 20s and have a high risk tolerance you could go 80-100% Equity with 0% or 20% fixed income. If you’re in your 50s with high risk tolerance you might better benefit from a 60% equity 40% fixed income blend. As for the ETFs VT/VTI/VOO/SCHD/QQQM are always crowd favorites for the equity side For your fixed income portion make sure you spread well across the yield curve since interest rate action is bound to happen eventually. Spreading through the curve won’t make you the most money but it will give you the least amount of volatility when rates do eventually change. What I mean by spreading take these three treasury ETFs for example VGSH, VGIT, VGLT and even blend of those three spreads you nicely against short, mid and long term treasuries. Hope this helps.
50% FFNOX 10% SCYB 10% VGSH And 30% whatever degenerate bad decision is being hyped here.
Honestly not bad, but for somebody retired, as long as the yield is here, fluctuation in values are not that important. Keeping that in might and trying to simplify a bit and get a bit more yield I would consider something like that: 30% VT 20% VCHD 20% VCLT 10% VGSH 10% GLD 10% in an REIT ETF.
Honestly, for someone in their early 20s with a long time horizon, this is a pretty solid mix — well-diversified and definitely leaning into growth while still hedging a bit. You’ve got U.S. broad market (VTI), tech (QQQ), international (VEA/VWO), and a sprinkle of thematic plays like clean energy (QCLN), biotech (IBB), and even a dash of crypto. Love the ambition. If anything, you could maybe simplify a bit — QQQ overlaps a lot with VTI already, and QCLN/IBB can be spicy, so just make sure you’re okay with the ride if things get choppy. Also, 5% in bonds (plus VGSH) is totally fine, but might not move the needle much at your age unless you're really set on some stability.
Two Fund portfolio, SPLG (State Street S&P 500) and VGSH (Vanguard Short-Term Treasury)
I would do a 2 fund portfolio with VT. Mix it with VGSH so you have a little bit in cash. Maybe like 90% VT 10% VGSH and as you get older (like 40-50) change the allocation to like 75% VT 25% VGSH
You could buy a long-dated put (maybe 12 months) and then repeatedly sell short-dated covered calls to pay for it. I believe that is the most cost-efficient way to do it. But it’s tough to do this in a falling market. To make more money you could be aggressive with the covered calls and sell them just above the stock price. That strategy works in a falling market. Ultimately though, staying in stocks in a falling market is guaranteed to be messy. I’m sure you don’t want to bail out of holdings that are underwater, but still you might consider selling some of your equities and buying SGOV or VGSH. They are yielding around 4% and have fairly stable value. There’s a real chance that the stock market is going to be on a downward trend for a long time.
Just as another option to look into that I haven’t seen anybody say - VGSH. Short term 1-2 year treasuries. Current yield is 4.16%. If rates get cut it will stay at higher rates than very short term bonds like SGOV. Might be an idea to allocate some of the savings to VGSH or something similar especially if the time horizon is longer than the next three months.
Bro. VGSH or VGUS/VBIL very short-term credit. Maybe a small bit of AOA or something but equity markets can be down if you must sell at that 6 year mark.
Yeah, VGSH is not doing anything, in fact it’s losing money, I’m not sure I understand. I have been thinking about getting away from VOO, particularly because of TSLA. I think that it’s vastly overvalued and their CEO Elon is alienating most of the western world with his DOGE and arm antics. I was thinking of looking at Japan for diversification, as well as wanting to buy up some COST and BRKB when the U.S. markets settle. I really don’t trust anything in the U.S. right now. In a recession, everything goes down, even consumer goods, utilities, etc. I’ve got some assets I could throw into the market later in but right now, I’d rather keep out and hold what I’ve got.
Dude thats a fine investment mix. You just started so the day to day numbers are meaningless. If things keep running downward you can slide your VGSH into VOO at a nice discount. Dont sweat the short term, block your Motley Fool emails and articles, and ride those ETFs you will do well.
I don’t know, my recent investment in the market is doing great! I LITERALLY just opened my first portfolio yesterday. Yesterday. 32 shares of IBIT. 7 shares of QQQ. 20 shares of USO. 100 shares of VGSH. 20 Shares VOO. My first day on the market I’m red… currently ($350) and rising.
I LITERALLY just opened my first portfolio yesterday. Doesn’t look great. 32 shares of IBIT 7 shares of QQQ 20 shares of USO 100 shares of VGSH 20 Shares VOO. My first day on the market I’m red… currently ($350) and rising.
Money market funds or short term treasury etfs like SHY or VGSH. VTIP is fine too.
I use 2 year, VGSH, a bit risky but I wanted to get the yield for next 2 years in case I am wrong and the market keeps going up.
If I'm 22 yo with long investing horizon, my portfolio would be 90% VOO 10% VGSH You're diversified which lowers your risk but also lowers your returns, if you're this young, your portfolio needs to be geared towards growth in my opinion.
Just do 70% VTI 20% VXUS 10% VGSH And you’ll never need to pay an advisor
VGSH VGIT VGLT (short int long bonds) SPIB SPHY (corporate int and high yield bonds) VMBS (mortgage backed securities) My bond allocation is divided evenly between all six. They all pay every month. Some perform better in certain conditions than others. I like the outlook of all of them and plan to hold them all indefinitely. In my 401k I have just FXNAX (Fidelity MF AGG / BND equivalent) because no other real bond choices.
My bond strategy is a second tier emergency fun in I series Bonds. Then I have multiple bond Etfs: BND, VGIT, VGSH, VUSB. I switch those four around and have a duration I am comfortable with. Having multiple ETF's makes it easier to Tax loss harvest. My strategy is not the recommended strategy by many people, but it works for me.
7-10 years is fine so long as they mitigate risk. Like 30% VOO, 10% VXUS, and 20% VBR, with the remaining split into bonds/treasuries, 30% VGIT and 10% VGSH. Rebalance every year and you should be able to see 4% to 5% growth, enough to beat inflation, and nothing hugely overlapping or correlated, and fairly diverse.
if you want to idiot-proof this just buy VGSH or SGOV
Just buy five funds that mimic each of those 20% baskets? Off the top of my head: VOO, AVUV, VGLT, VGSH, IAU. There’s not going to be a one fund that mimics a lazy portfolio and you are better off doing your own allocation for something like this so you have the opportunity to rebalance and add at various market opportunities.
If you want safe money, the best option probably is either short term Treasuries or short term TIPs. Look into SHY, VGSH and VTIP. Defensive stock are still stocks, so they’re still risky and they’re still highly correlated with the stock market. My point is, they’re safe relative to VOO, but they’re not the safest thing in the world.
Government bond ETFs, very liquid. It's where we keep our emergency fund and housing fund. SGOV(0-3 months), VGSH (1-3 years), ISTB (1-5 years), IEF (7-10 years) or even AGG (less sensitive to federal interest rates).
Look at the top 5 or 6 holdings of the S&P currently. The vast majority of that gain is just in a handful of companies. It isn't going to go on forever. If you shift everything there you're gambling your retirement on that handful. Granted it's better than all the Enron employees that were 100% invested in company stock, but it's not better by a super wide margin. As others have mentioned VGSH is probably not great. If you want to play the likely bond rally (due to the impending cycle of rate drops), then a bond fund with a middle duration is probably more likely to profit. But if you are sure you have 30 more years, you really don't need bonds.
I don't think it's a bad move to consolidate a little. Would get rid of the VGSH - no need for it here. I'd put that in VOO myself. Maybe rolling VSS into VXUS makes sense too. VXUS has some exposure to mid and small cap companies to begin with. VXUS has also been a better performer over 3, 5, and 10Y. Or maybe not the whole position... just a piece of it. That said, I think 20% int'l is fine.
That allocation seems good to me, idk about the 5% short term treasuries, its just lowering your Beta, and since you have 30 years you could for sure put that in equities too. Only region I feel is lacking here is US small caps. This is a great opportunity to go VOO + VO + AVUV (a small cap value ETF) so you get exposure to the whole market while getting outsided risk factor tilts with AVUV in the small end of the market. This is a great way to build US exposure since it underweights the single worst sector of the market of all time; small cap unprofitable growth stocks. Id suggest chopping off VGSH completely and 5-10% of VOO or take some of both VOO and VO and allocate 10-20% to AVUV. The rest being 20% international seems fair and prudent to me.
Buy TIPS, I recommend VTIP from Vanguard. If you're intent on using active funds I would not recommend JEPI and would instead go with PIMIX or Vanguard's multisector bond fund which is similar. You can do 25% VTIP, 25% BIV (Intermediate Term Corp/Government Bonds), 25% PIMIX, 25% VGSH. With covered call etfs you're getting all the volatility and a limited upside, they do not make sense for anyone honestly.
Some comments: 1. As others have pointed out, you’re looking at price share and not at total return. If you take into account interest payments, the numbers are different. 2. Bonds can be risky. They are subject to two kinds of risk: Interest rate (or duration) risk and credit risk. First, they are subject to the risk of interest rates going up before they reach maturity. If for example a bond has a 2% yield and new bonds of the same duration have a 4% yield, then you have to sell your bond at a discount for people to buy it instead of the higher yielding new bond (but if the interest rate goes down, the price of your bond increases). Second, corporate and municipal bonds are subject to default (the issuer doesn’t pay its debt) or downgrade (the issuer is seen as more risky than before) risk. Treasury’s don’t have this kind of risk. 3. You only have to look your investment portfolio as whole. Bonds are not only used because they’re less risky, but also because they’re subject to different risks than stocks. They serve a diversification purpose. The idea is to invest in assets that have positive expected returns and that are as uncorrelated as possible. In general, stocks and bonds are uncorrelated. The idea is that if one goes up the other can go down. There are rare environments where they become positively correlated (periods of unexpected high inflation) and we just went through one (2022). 4. Stocks are even more risky. Stocks can have 40% to 50% drawdowns (it happened twice in the 00s). This won’t happen with a bond fund. Stocks can also have negative real returns for more than a decade. 5. There are ways to lower bonds risk. You can have a fund with a shorter duration and that only holds Treasuries. For example, VGSH only holds short duration Treasuries. Its drawdowns will be low and not last long. 6. You can also hold short duration TIPs (inflation protected bonds) through the ETF VTIP. During retirement it’s probably a good idea to hold both VTIP and another bond fund. 7. You should still hold three years of cash/CDs during retirement anyways. However, it’s probably a good idea to have more fixed income than that. 8. Usually during retirement it’s recommended to have a 60/40 or 50/50 stocks and bond portfolio on top of the three years emergency fund. Some people also recommend 10 to 20% gold, as it is an uncorrelated asset to both stocks and bonds. The idea is to reduce drawdowns of your whole portfolio, which are really risky during retirement due to sequence of returns risk (if your portfolio has a big drawdown during your first years of retirement, there’s a risk that you will run out of money during your lifetime).
Short-term Treasuries (T-bills) are effectively cash and the approach you are describing -- eschewing intermediate and long term bonds in favor of T-bills due to the current inverted yield curve -- is called 'the cash trap.' The problem you face when you put yourself in the cash trap is that once rates are cut, the rates on your T-bills will decline to the new prevailing rate as they mature and you roll them over, and the prices on the higher-yielding intermediate and long-term issues will rise, forcing you either to pay a premium over par to acquire a longer-term bond position or to accept the lower rates of new issues. The best solution to the cash trap is to avoid it entirely by diversifying your fixed income portfolio across the yield/duration curve, so that when rates inevitably decline you gain the benefit of the price appreciation on the intermediate and long term bond holdings and their higher yields relative to new issues. In other words, don't just put your fixed income portfolio entirely in SGOV or VGSH. Either put it in GOVT or BND or VGIT or at least split it between the shorter-duration and intermediate-duration bond funds.
>Alright, so I don’t really understand why anyone would choose a CD or Treasury Bond over the S&P or a similar ETF. Reduction in portfolio volatility and reduction in sequence-of-returns risk are two use cases for fixed income that immediately come to mind. >Historically, the market has returned nearly 10% on average (more in recent years), which is a lot higher than the aforementioned options. Reliance on average return over a long period of time when you are in the withdrawal (retirement) phase is the very definition of sequence-of-returns risk. Bill Bengen, the authors of the Trinity Study, and countless others have researched and shown that during the withdrawal phase it is the sequence of returns, not their average, that determines portfolio survival. >Your money is also not locked up. Your money isn't locked up in fixed income either, at least when an investor adheres to best practices for asset-liability matching. Using money market funds and short-term Treasuries (e.g. VGSH or SGOV) for short-term expected income needs and intermediate-term bonds (e.g. BND or VGIT) for longer-term fixed income to reduce portfolio volatility is a proven and reasonable strategy. >Even if a recession lasts years, the market still bounces back higher than before. I believe people have the illusion of safety for a lower return in this case. Again, this seems to show a misunderstanding or underappreciation of sequence-of-returns risk. If you are retired and 100% equities during a bear market, you are selling your equities holdings at depressed prices, which leaves fewer shares remaining in your portfolio when the market recovers. Your portfolio therefore experiences less upside than the market as a whole, because you've sold off shares during the downturn. As Bengen and others have shown, this increases the likelihood that your portfolio will not meet your income needs for the duration of your retirement. >The only way any of these choices could fail is if the US government went under (except for the CD, which is even more fragile and based on a single bank), which would cause the same outcome either way. Sequence-of-returns risk does not require the collapse of the government. It requires only that a retiree consume too much of his or her equities allocation for the portfolio to recover, which is apt to occur most often during market downturns in the first decade of retirement. The most stark example of this was the low 30-year portfolio survival rate in Bengen's paper for those who retired in 1967-68 and suffered through the stagflation of the 1970s. >Also for the recession argument, since nobody can actually call a recession, would it not be the same as trying to time the market? By remaining 100% equities as one enters retirement, one is arguably attempting to time the market by wagering that they will not experience a bear market for the next 5-10 years and that the portfolio will continue to grow over that period until income withdrawals do not threaten portfolio survival (i.e. the portfolio value is so large that your withdrawal rate won't exhaust it and you'll die with a large estate). If they're wrong, however, the resulting harm to the portfolio can be catastrophic. This is why many investors use fixed income, in different ways, to address this risk.
22yo \~20k 20% IAUM (Gold ETF) 20% ITOT (Large Blend ETF) 18% VBR (Small Cap ETF) 18% VGLT (Long term treasuries) 18% VGSH (Short term treasuries) 5% WFC 1% JPM Any input appreciated
i just invest in index ETFs. like VV, VB, VEU, VGSH, SGOV. so for other stuff, maybe others can help you out.
Not enough information. For safe yield of 4% plus t bills, cd, mm etf such as VGSH.
0 crypto, 0 CDs 80% SPY 20% VGSH
Much of my ROTH IRA is in Vanguard (not my choice) so I use their short term treasury EFT, VGSH. It's not the best. Short term or long is based on what is paying the most. I'm also using iShares SGOV. I'm just going with the A rated short term treasury EFTs. What I'm looking for is a history of price stability and dividend yield, low fees from a trustable brokerage. I have also dabble in covered call EFTs with a small percentage in order to get the yield up hither than 4%. The trouble is that inflation is outrunning the dividends. Right now, despite everyone telling me I'm wrong, I've got 100% going to my maximum in my Roth IRA and then to SGOV for the rest. I'm going to keep doing that until the stock market becomes something I can understand and trust.
I am not a financial adviser, so make sure to talk to a financial adviser before making any decisions Step 1: A 9 month emergency fund, and if feasible, either buy a home or pay off your mortgage. Step 2: Roth IRA and Custodial accounts for your kids. Try and get an custodial broker account up to 20/30k to take full advantage of kiddie tax(free $2,500) moving it to a custodial savings accounts, or the kid turns 15. Step 3: Maxed out Roth? I guess start a normal investment account. A simple portfolio would be 60% VTI and 40% BIL(60/40 stocks bonds), but fitting 10% GLD could help with inflation. An aggressive account could be 60% NTSX, 10% GLD, 20% VGSH, 10% VRIG. NTSX is 90% stocks and 10% treasury futures with 6x leverage, so it's effectively 90/60 stocks/bonds. There is more risk in using leverage.
I don't know any short term AA-+, vanguard has VUSB/VCSH but they hold some A/BBB. Alternatively there are various treasury ETFs like VGSH, or SGOV/BIL for 1-3 month tbills.
VGSH is short term bonds only. Just 4 years ago the short end was near 0%. The point in buying individual bonds and CDs is you get to hold to maturity and collect the yield, then redeploy your cash into whatever maturity you want. You control the overall average duration of your bond portfolio. With funds, you're pretty much just stuck perpetually with whatever the fund's average duration is. If this is what you want to do, you should just do a total market bond index fund, and not VGSH.
I don't understand the purpose of buying individual bonds or CDs anyway. Just buy a bond fund like VGSH. There's very little change in the price, and you'll get monthly income just as you would on a bond. Much easier to sell if you need cash, as it acts just like a share of stock. Saying there's no risk in CDs losing value is not really true. Say you bought one at a 5% yield. Next day war China invades Taiwan, inflation rockets to 20%. The yields on newly issued CDs are now 20%. Yes, on paper your CD has not changed in value, but in real terms you are now losing 15% on it due to inflation. VGSH would drop in value, but you'd now also be owning those 20% bonds little by little as they are added to the fund. In summary, I believe there is no point in buying individual treasuries or CDs. Just buy funds.
>but I'm not so young that I'm willing to just risk it all. It sounds like you are invested above your risk tolerance. What is your current allocation look like? I will say making drastic changes like going all in or all out is usually not a great idea, the best advise I can give is construct a portfolio that matches your risk tolerance and leave it That could be something like 70% equities / 30% bonds or 60% equities/40% bonds or what ever you feel comfortable with BND is a classic total USA market bond fund, there is interest rate risk so it can fall when rates rise (or rise if rates fall) so it's not 100% safe To get safer you can use VGSH what only holds short term 1-3 year government bonds, so there is still some limited risk If you want to invest in something stable unlikely to ever lose money a fund like SGOV only invest in ultra short term government bond 1-3 month, being so short term there is almost zero interest rate risk
Some bond etfs can be low risk. Bonds are not all equal, if you lost big in bond etfs you likely had a long duration bond etf that got crushed when interest rates went up. Look at safer bond etfs like SGOV, VGSH, BIL.
>One big issue I'm encountering is the timing of ex-dividend dates, that makes this tricky if moving money around frequently. This should be a non-issue. These assets typically move in a saw pattern just accumulating their dividend in a way. It doesn't matter if you buy/sell right before the the dividend or right after. Before getting into individual funds there are basically government and prime/corporate funds, the later should give higher yield with slightly more credit risk, but still low. Although the extra yield isn't much a premium now. If you are thinking about duration, even "short term" funds are pretty stable. VGSH, for example, is 1-3 years, but you would have only lost like 5% in 2022 which was one of the worse years for bonds, and have already recovered.
For pretty much a decade VGSH paid pretty much nothing. I have no idea why anyone would've purchased a short term treasury fund when rates were close to 0%.
VGSH was at $60 in 2009. Today, it is $58.32. Wouldn’t it be better to park that money in a high-yield savings account instead?
With such a short time horizon to retirement your allocation needs to be almost as conservative as during retirement, assuming this will be your primary source of income for the rest of your life and you cannot afford to make mistakes with it. A stock/bond portfolio with a slight tilt to stocks would be acceptable i.e. 60/40. If you believe in America like Warren Buffett then all you need for stocks is SPY or VOO for stocks. For bonds you'd just need a short US treasury fund like VGSH. Rebalance to 60/40 every year and you're set for life if history repeats itself. The great thing about rebalancing is you will naturally be buying dips and taking profit near peaks. As for withdrawal during retirement the 4% rule is a good start, but it's not to be followed blindly. You still have to watch your portfolio to make sure you're not running out of money or spending too little.
Short term treasuries for the highest yield & lowest volatility (VGSH), long term for a lower yield but higher payoff from price appreciation (TLT).
I’d make sure my retirement plan is suited to exactly what exposure I want, you and me are roughly the same age so I’m just gonna go off what I currently have/suggest; 1. Max out retirement accounts make sure contributions are ROTH so you don’t pay taxes when you withdraw, you will thank yourself for this later on. I don’t know what your company’s retirement plans investments are so I can’t really speak on that, if it’s a major company and not going bankrupt anytime soon you’re probably just good with what they have. Although I would start a ROTH IRA on your own and contribute to that aswell. 2. You guys are relatively young so you don’t need to be that conservative in terms of investment risk, put most of long term savings into an index fund like $VOO (S&P 500), put a little gold in there ($GLD), some long term gov bond funds ($TLT or $IEF, IEF a little less swings, $VGSH if you want barely any swings). 3. If you want to go into real estate, check out price:rent ratios in the area you want to rent out, the lower the number the better, all else equal, means more bang for your buck. Also contrary to popular belief, it’s actually better to put up *less* of a down payment **as long as the return on that freed up capital earns more than the cost of interest on the mortgage**, if you’re not going to invest that freed up cash, *then* put up a higher down payment
I don't play this, but I noticed **VGSH** had two recent days with highly unusual volumes. 17.9M yesterday and 24M on Tuesday. For perspective, she usually trades 2-3M. VGSH is **Vanguard Short-Term Treasury Index Fund ETF**. The last time she traded that kind of volume was May 11 *(19.3M)* and 12 *(10.4M)*, 2023. Check the chart. That was the start of her plunge. Of course, *plunge*, with air quotes, considering how little this one moves. But something to keep in mind for those who play or rely on Treasury news.
SGOV is one step away form a Money market fund. Good income in the moment, but not guarantee for more than a few weeks. I am in VGSH, VCSH, VCIT, VGIT, VWESX, and VUSTX - I am going for a mix of treasury and investment grade corporate bonds - some short term, some intermediate term, and some long term. I am about 50/50 Treasury/corporate and 25%, 60%, 15% short, intermediate, and long term
VOO: 38% VXUS: 22% AVUV: 20% AVDV: 10% VGSH: 5% VTIP: 3% SGOL: 2% 30, mid 7 figures invested, looking to have a 60% US / 30% International / 10% bonds/treasury/money market. I believe in small cap value tilt while understanding I want to keep things simple. I dont want to have complete US Bias. Low Fee's. Want to avoid mid cap growth I understand vxus will have some but value simplicity over. Im able to easily keep %'s aligned. Would this structure be favorable? They are structured in tax advantage*
I just invested in Vanguard Short term treasury ETF. VGSH. I'm not sure if it's good, but it's safe as we navigate potential recession. (I think).
Just looked up vanguard one, VGSH, has 5.17% yield. Does this mean, as long as you keep money in this fund it generates 5.17% interest? Definitely seems easier than treasuries.
The yields are good now. The yields were worse 6-8 months when you initially bought into a bond etf. Hence, the price is down. I have bonds in my main account, but just 10%. And I like to put that in long term bonds (I do VGLT) to specifically take advantage of the inherent volatility in relation to overall size of portfolio. If this is a savings account, and you do not want to risk principle as much, you need to be in shorter term bonds and TIPS for inflation protection. Right now my savings is in SGOV because the yield is really good, but once that goes down, I plan on moving to VGSH and STIP primarily, with maybe 10% in VT. Something like this. https://www.optimizedportfolio.com/invest-emergency-fund/#%e2%80%9cwhat%e2%80%99s-the-best-etf-for-an-emergency-fund%e2%80%9d If you don't mind risking principle more but want to stay conservative, the Harry Browne Permanent Portfolio weathers different economic conditions well and averages a 7% CAGR since the 70s. https://www.optimizedportfolio.com/permanent-portfolio/
Short term treasuries like BIL, VGSH, SGOV. The higher that rates go, the more these will pay out while maintaining minimal downside price action.
I think picking three individual stocks is way to risky because of lack of diversification. I can't predict which company will be still growing rapidly years from now, especially if they are not huge companies like WMT, COST, MCD, AAPL, AMZN, and MSFT. I'd guess three stocks could be ETFs: An S&P 500 ETF such as Vanguard S&P 500 (VOO) would provide diversification. A foreign stock ETF such as Vanguard Total International Stock (VXUS) would help provide diversification in a global economy. It's unclear what the future of the US is like. And a bond fund such as Vanguard Short-Term Government Bond (VGSH) would help provide some income with lower risk of price changes, especially if one is getting close to retirement that average time to maturity should be shorter, maybe T-bills. If the yield cure becomes normal then maybe get longer term bonds. A younger person would need less in bonds and more in stocks, especially at times the stock market is down.
Just as an FYI - VGSH is an ETF and not a money market mutual fund. If you use an ETF, many brokers in the US do not charge any transaction fees for ETF trading. You would buy and sell VGSH as though you are buying and selling any other ETF. Note that VGSH has a weighted average maturity of 1 to 3 years with a current average duration of 1.9 years. That means that you typically would hold it for at least 2 years and reinvest any distributions to protect the principal if that's the goal. The current average yield to maturity is about 4.9% so you can expect about 4.9% annually over approximately 2 years - [https://investor.vanguard.com/investment-products/etfs/profile/vgsh#portfolio-composition](https://investor.vanguard.com/investment-products/etfs/profile/vgsh#portfolio-composition) You have mentioned Vanguard a few times - is that because you have a Vanguard brokerage account. Note that if you need liquidity with principal protection - a money market mutual fund would be more appropriate - [https://investor.vanguard.com/investment-products/money-markets](https://investor.vanguard.com/investment-products/money-markets) \- More information about money market funds in the FAQ here - [https://www.reddit.com/r/investing/wiki/faq/#wiki\_what\_is\_a\_money\_market\_fund\_and\_how\_safe\_are\_they.3F](https://www.reddit.com/r/investing/wiki/faq/#wiki_what_is_a_money_market_fund_and_how_safe_are_they.3F) Vanguard also offers bank sweep products and brokered CD's - [https://investor.vanguard.com/investment-products/cash-investments](https://investor.vanguard.com/investment-products/cash-investments)
Thanks. VGSH currently has a 30-day SEC yield of 5.15%. Current 4-week T bill is 5.34%. So the only difference would be 0.19%? Nothing else I would have to pay Vanguard? You're right, for ease of use Vanguard would be better since I want to be as hands off as possible.
If you are looking for diversification in ETFs, maybe add some VXUS, Vanguard Total International Stock and some VGSH, Vanguard Short-Term Government Bond. In the future if the US Doller gets weak you may want to sell some of VXUS at a profit and add to VTI or VGSH if yields are really high. And if the stock market goes sideways for the next ten years, you can re-invest the dividends from VGSH into stock ETFs.
You can buy short term treasury ETFs (VGSH SCHO), some brokers allow you to buy tbills through their platform.
No offense. Daughter used to work there and I respected what she did as a financial consultant. But I left on my own as she could not even match what I can get elsewhere fee and product wise. I can pay nothing, no commission, no expense getting 5.5% for 1 year US Treasury, or 5% for 10 year(dipped a bit) paying me every 6 months, state tax free. I also can pay 0.35% not 3% buying SWVXX getting 7 Day Yield 5.37%. Use it as a saving account. Want to cash out I sell 24 hour before. Depending on one's tax bracket some say VGSH, VMSXX, VUSXX, FDVV are all attractive.
SGOV only has treasuries with a 0-3 maturity. I recommend SHY or VGSH to get exposure to a bit longer maturities.
I think nothing over 3ish months is completely safe, but I also think 2 year and higher are attractive right now based on the most recent Fed projections. I'm almost entirely in VGSH and SHY right now, which have average duration of about 1.9 years. I've sold OTM calls on these so I'm not completely exposed if we fall.
SEC yield of GOVT is actually 4.7%. If you think you will need the funds within the next couple of years, then buying short term treasuries directly or a short term Treasury ETF like SGOV or VGSH is probably best. Zero or very little price movement with those choices.
There are many ways to get 5.4% with medium/low risk. Vanguards investment grade short term and intermediate term bond funds (VGIT and VGSH) pay about 5.5% right now.
No worries dude! Part of learning. Absolutely you can, VGSH is vanguard short term so they hold 2 year treasury yielding ~4.9% a year. If you want bonds to park money in try googling: treasury bond ETFs
Roughly 18% of my 5 portfolio is in VGSH.
20% SCHD (Dividend Etf) 20% VDC (Consumer Stapes Etf) 20% VGT (Pure Tech Etf) 15% VGSH (Short term treasury etf) 15% VGIT (Intermediate Term treasury etf) 10% VGLT (Long term treasury etf) This is my 60/40 Portfolio. You can trade the treasuries for municipal bond etfs if you wish to lower your tax burden. People here will probably balk at having 20+ year treasuries in their portfolio, but we're just coming off its worst year in history. There are hedge funds short it, but I think that ship has sailed. You can exchange it with VCSH, which is a short-term investment grade corporate bond etf, but the nice thing about the 20+ treasuries is that they offer awesome downside protection when the market absolutely collapses. A general rule of thumb is investing your age in fixed income and the rest in equity (you are 42, so you'd invest 42% in fixed income assets and 58% in riskier assets). You can also remove 5% from any of the etfs and invest that into a gold etf, which decreases portfolio volatility in general but is otherwise useless lol (not a productive asset).
Because you have made a few fundamental errors. 1. You are looking at price only and not at the coupon payments, for bonds this matters a lot, if we add back the coupon payments we get \~3% CAGR [proof](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2018&firstMonth=12&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTIP&allocation1_1=100) 2. This is still below inflation, how? Well VTIP is a bond fund so has duration risk, when interest rates go up then VTIP that has duration risk will go down. TIPS protect from inflation over the full life of the bond, in a fund it is more complex as you are buying and selling a whole slew of bonds, not just one. 3. Let's look into duration the average duration of VTIP is \~2.5 years let's then compare with VGSH with a duration of \~2 years, so a bit shorter but still comparable. VGSH has a CAGR over the period of \~0.8%, so we see the inflation protection added about \~2.2% compared to average inflation over the period \~4.2%. So the duration risk hurt, but not as bad as it could have been.
>2) the discounted share price results in increased yield as you mentioned, causing upward pressure on the share price that counters effect 1) to some extent. No, this makes absolutely zero sense and is literally impossible. Yield is a function of price. Increased yield can't create upward pressure on price because increased yield is a consequence of s decrease in price, so you would have to believe that falling prices cause rising prices, and that's a dumb belief. >So the price of VGSH is not going up per se, but it is cushioning its own fall in a way and going down less than it would otherwise. No. >So when the distribution yield is less than the SEC yield, the difference is made up by the share price going down less than it otherwise would given the rising interest rates. No. >I mean this kinda makes sense given that interest rates have jumped up and the price of VGSH has only gone down ~5%. If 1 was the only effect in play, the price should have totally cratered. It doesn't make sense, and your claim that the fund price "should have cratered" is entirely wrong. VGSH is a short term fund. Its price is always going to have low volatility. The difference between the SEC yield and the distribution yield is the capital appreciation that the portfolio's bonds will experience over time. The end. The average bond held by VGSH has a price of 95 and a maturity of 2 years. I don't know what the average coupon is, but roughly a 2% difference between the distribution yield and SEC yield (which is basically yield to maturity) is completely expected.
>The discount accretion should be captured in a gradual increase in the per share price Yes that would make total sense! Only--is that trend actually playing out in the share price? It's hard to tell because many other factors can also influence the share price at the same time. Ok here is a theory. Could it be that **1)** rising interest rates create downward pressure on the share price because the older lower-rate bonds are now less attractive **2)** the discounted share price results in increased yield as you mentioned, causing upward pressure on the share price that counters effect 1) to some extent. So the price of VGSH is not going up per se, but it is cushioning its own fall in a way and going down less than it would otherwise. So when the distribution yield is less than the SEC yield, the difference is made up by the share price going down less than it otherwise would given the rising interest rates. I mean this kinda makes sense given that interest rates have jumped up and the price of VGSH has only gone down \~5%. If **1** was the only effect in play, the price should have totally cratered. What do you think, is this making any sense?
The current distribution yields are based on bonds that were added some time ago and do not carry the current interest rate implications. Hence the divergence between distribution yield and yield to maturity. Because of this, funds like VGSH tend to inverse performance to interest rate. Also principal returned to the fund at maturity is used to buy more bonds. If interest rates remain elevated for a year or two and an investor suspects that they will start to go down, that would be the time to get into VGSH. Otherwise there are far better places to park cash right now.
Interesting. With VMFXX paying > 5%, does it make sense to own short term bonds USFR, TFLO or VGSH? Maybe the best idea is to just park in Vanguard Money Market.
For sure. HYG typically moves/correlates well with tech and other risky assets. Generally speaking it's not bad when markets aren't frothy, but you're buying at a premium compared to the beginning of the year. That being said it's currently like 0.25% discount to NAV (Net Asset Value). Right now if you're just looking for yield and somewhere to park cash maybe look at BIL, VGSH, VFISX, ICSH, SHY. Another alternative would be finding a money market account or a short term CD through a bank. Some banks are offering 5.3% APY on a 3 month, so you'd effectively collect about 1.3% over the term of the CD. If you do go that route ensure it's not on auto renew.
Short term maturity bonds and T-bill such as SCHO, VGSH, and SGOV.
It is not super easy to find for everything. But Vanguard funds show it in their page on each fund. Just type "VGSH Sec yield" (for example) into the google search
You need to check SEC yield. The yield you are looking at is going back 12 months and taking the average. SEC yield is looking forward. VGSH is 1 to 5 years SGOV is 90 days, I think. So they are not the same SGOV SEC yield is around 5%. I check it all the time. VGSH is around 4% I think. I am going form memory. I did not check it again.
I checked VGSH vs SGOV on yahoo: the first has a yield of 1.9%, the second of 2.8%. Aren't they more or less the same? Why is the difference so high? And why I'd the yield so low? -- my coupons for last month's sgov was 0.4% -- that's one month.
Most investing websites have screeners where you can look for individual bonds or bond ETFs or mutual funds. If you don’t know a lot about bonds currently the latter (ETFs and mutual funds) is easier. If you are already comfortable with VOO you might look into VGSH, VGIT, VGLT for short / intermediate / long term treasuries or something like BND which is a big pool of all those plus corporate, municipal, etc. Look up some articles on asset allocation and performance over time and get a sense of what your risk appetite is, what max drawdown you are comfortable with, and see how much a bonds recent yield is vs long term yield is. I would just read a lot until you get more comfortable considering those asset classes and what they can bring to your portfolio.
Yes. You are correct. And the same is true with VGSH. If you buy VGSH and you hold it for 2 years, it doesn't matter what happens to interest rates because you will get that yield from VGSH. Your point that if rates rise between year 0 and year 2, the value of VGSH will fall is true. But the exact same thing will happen to the treasury, when interest rates go up, the treasury loses money in same way as VGSH.
It works the same way with a fund. With $VGSH since you mentioned it. The fund is designed as a 1 - 3 constant duration year treasury fund. The fund will have an average yield to maturity and average weighted maturity. If you hold the fund to at least the average maturity and reinvest dividends, it will yield the average yield. The fund holds underlying bonds at different maturities to adjust and maintain a constant duration. So today - if you invest in $VGSH - you can expect that in 2 years that you would have an annual yield of about 4.2% - [https://investor.vanguard.com/investment-products/etfs/profile/vgsh#portfolio-composition](https://investor.vanguard.com/investment-products/etfs/profile/vgsh#portfolio-composition) Treasuries have the same interest rate risk that you describe - if an investor bought a 2 year t-note 2 years ago, they are susceptible to the same rising or falling interest rate risks. You can smooth out the interest rates with a bond ladder - but that's kinda what you get with a constant duration fund.
Warren Buffet suggests 90% low-cost S&P 500 ETF (e.g. VOO) & 10% short-term treasuries (e.g. VGSH). It's a great strategy over the long term IMO.
ohhhh okay, So i should diversify my ETF’s basically? Not just put all my eggs into one basket for ex: $100k in VGSH
Ok, please correct me if i’m wrong. I just did the math and if i put $100k into VGSH and buy 1712 Shares, If each dividend pays around (0.15) per month my dividends would be paying me around $256 every month? Is this how it works?
I kind of don't get it either. Why buy a bond ETF instead of just buying and rolling treasury bills? I don't lose anything from my principal; the yield is higher than most if not all, bond ETFs. Are people hoping to "buy the dip" on BND, TIPS, etc, and hope the price recovers? I mean if anything, maybe stick with VGSH.
Yeah sorry I updated that. I meant to imply annualized yield not that yield comes out every month. 3% yield is 0.25% per month which is basically exactly what Vanguard Short Term (VGSH) and Long Term (VGLT) paid a week ago against their share price.
...because I'm all in VGSH instead of VTI. You're welcome.