Best Fixed Income Path Right Now

2,040 Views | 7 Replies | Last: 3 yr ago by Ag CPA
BlueHeeler
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AG
If you are wanting to buy some fixed income right now to sell at a profit when rates go back down when the recession hits, what's better?

5 year CDs at 4.9%-5%
10 year treasuries (4% coupon, yield @ 4.125%)

I guess conventional wisdom is that the 10 year treasuries will appreciate more in the face of falling rates. Thoughts?
Cyp0111
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Money Market account or 2 yr treasury given lower volatility w duration for the 2 yr. Vanguard Admiral MM is best bet imo.
Troglodyte
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AG
To accomplish the sell at a profit goal, I would think you are best off buying bond funds.
OldArmyCT
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AG
If you want a profit instead of bonds look at oil stocks with decent dividends.XOM pays 3.28% at todays price, CVX 3.14%. JMO.
Ag CPA
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AG
If you are trying to sell out early to capitalize on lower rates then CDs won't work. Typically long-duration bonds hold the most upside for that kind of thing and there are plenty of ETFs and funds that you can invest in to make it simple as mentioned above. I'm starting to look at this as well but not ready to pull the trigger yet, need to do some more research.
BlueHeeler
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AG
Actually, brokerage CD's that you can sell on the open market will work for this sort of thing (like they have at Fidelity). I am scared of messing with bond funds because of all the capital gains distributions and such. I am sort of leaning towards buying some 10 year treasuries. The auction window is open on those notes right now.
Chef Elko
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AG
I'm getting 3.75% with RobinHood on my uninvested cash.

Edit: ah, you want to sell the bonds when rates lower.
Ag CPA
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AG
Cool, let us know what you decide.
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