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Virginia, Northern Neck | We really like U.S. Treasury Floating Rate notes.
Floating Rate are 2-year notes, that re-set every 2 weeks to the 90 day T-bill rate, effectively a 2-year note with 2-week duration
We use ETF USFR, some people use TFLO.
Another excellent ETF SGOV, comprised of 30, 60, and 90 day Treasury bills.
These short-term obligations are equivalent to making payday loans to the U.S. Treasury.
If you live in a state with income tax, the dividends you earn from these ETFs is not subject to state tax, it is subject to federal tax at your marginal rate.
We also like Vanguard VUSXX money market, usually more than 90% not subject to state tax.
All of those investments have yielded 5.3% or more during the past 12 months.
Our Treasury is trying as hard as they can to over-weight short-term debt, hoping against hope that their cost of borrowing will drop.
Because all Treasury debt is sold at auction, the only way they can manipulate the auction price is for the Federal Reserve Bank to purchase debt.
Federal Reserve is under a mandate to reduce purchase and holding of Treasury debt, always subject to change.
Yes, for sure they will inflate the currency to reduce debt obligation, but we believe that short-term Treasury obligations are the lowest-risk way to preserve whatever buying-power we have.
As always, I could be wrong.
Edited by harry 11/18/2024 20:16
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Best place to park money for 2-year Max
