Buying Treasury Bills from Vanguard today

Discussion of the Cash portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 12:14 pm

I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I have only owned money market funds and bond funds. Have never previously directly own any form of bond or a Treasury bill.

I hope to do so relatively soon this afternoon so am seeking any kinds of hints and answers to the following question.

Please don't refer me to searching for anything in the forum as that will then put me into endless research / analysis mode, which means it will not happen today.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund. I'm currently in both the Vanguard Federal and Treasury money market funds but they are not good enough for me because they refuse to commit to 100% Treasury bills only. I still have a ton invested in equities so taking a ton of risk there. The other side of this barbell is the cash investment. I want ZERO risk and am willing to accept ZERO return in return for no risk.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?

2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature

3) I'm going to insist that I am on the phone at all times with a Vanguard representative as I do this since I'll be doing it with at nine different Vanguard accounts and I have never prior done so. The big question is a. If I don't get a busy signal b. And, if I don't how long the hold will be to actually talk to anyone.

4) Am I missing any other considerations?

Thanks

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
Kriegsspiel
Executive Member
Executive Member
Posts: 2708
Joined: Sun Sep 16, 2012 5:28 pm

Re: Buying Treasury Bills from Vanguard today

Post by Kriegsspiel » Wed Mar 18, 2020 12:29 pm

vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?
You can start a 4 week ladder at Treasury Direct, they sell them every week. If you want to rebalance just don't re-invest them when they mature.

You still do take a hit buying individual Treasuries (at Vanguard, anyways); even though they don't directly charge a commision, there's a spread.
2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature
IMO Vanguard is good at mutual funds, not at brokerage/buying and selling individual Treasuries.
4) Am I missing any other considerations?
As I mentioned in the other thread, Vanguard screwed up the sale of some Treasuries I tried to sell (correctly called the top, bros!). Was definitely a splash of cold water. I doubt anyone has had issues selling their long Treasuries mutual fund. How has it done tracking-wise?
I hated all the things I had toiled for under the sun, because I must leave them to the one who comes after me. Who knows whether that person will be wise or foolish? Yet they will have control over all the fruit of my toil into which I have poured my effort and skill under the sun. This too is meaningless. . . Nothing is better for a man than to eat and drink and enjoy his work.
- Ecclesiastes
User avatar
Tortoise
Executive Member
Executive Member
Posts: 1698
Joined: Sat Nov 06, 2010 2:35 am

Re: Buying Treasury Bills from Vanguard today

Post by Tortoise » Wed Mar 18, 2020 1:00 pm

vnatale wrote:
Wed Mar 18, 2020 12:14 pm
4) Am I missing any other considerations?
One practical consideration for online purchases of Treasuries at auction vs. secondary market is that you can place an auction order at any time of day or night (it just doesn't get executed until the auction), but secondary market orders can only be placed during the day when the market is open. You can't place a Treasury purchase order at night to be executed the next morning, for example.

Because of this, I personally purchase most of my Treasuries at auction because I do most of my financial bookkeeping at night after work, and I don't like having to remember to log into Vanguard during the day to make a particular Treasury purchase.
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 1:34 pm

Kriegsspiel wrote:
Wed Mar 18, 2020 12:29 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?
You can start a 4 week ladder at Treasury Direct, they sell them every week. If you want to rebalance just don't re-invest them when they mature.

You still do take a hit buying individual Treasuries (at Vanguard, anyways); even though they don't directly charge a commision, there's a spread.
2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature
IMO Vanguard is good at mutual funds, not at brokerage/buying and selling individual Treasuries.
4) Am I missing any other considerations?
As I mentioned in the other thread, Vanguard screwed up the sale of some Treasuries I tried to sell (correctly called the top, bros!). Was definitely a splash of cold water. I doubt anyone has had issues selling their long Treasuries mutual fund. How has it done tracking-wise?
Just two quick responses....1) I want to do it today which precludes spending the necessary time learning and funding the whole Treasury Direct route. 2) I have 8 retirement accounts I want to do this in. Treasury Direct does not work with retirement accounts.

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 2:17 pm

Kriegsspiel wrote:
Wed Mar 18, 2020 12:29 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?
You can start a 4 week ladder at Treasury Direct, they sell them every week. If you want to rebalance just don't re-invest them when they mature.

You still do take a hit buying individual Treasuries (at Vanguard, anyways); even though they don't directly charge a commision, there's a spread.
2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature
IMO Vanguard is good at mutual funds, not at brokerage/buying and selling individual Treasuries.
4) Am I missing any other considerations?
As I mentioned in the other thread, Vanguard screwed up the sale of some Treasuries I tried to sell (correctly called the top, bros!). Was definitely a splash of cold water. I doubt anyone has had issues selling their long Treasuries mutual fund. How has it done tracking-wise?
Back to this just prior to my making my call to them.

How big a spread is there going to be on a one-week Treasury Bill (paying practically nothing, I assume?)?

I will ask them about this.

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 2:20 pm

Tortoise wrote:
Wed Mar 18, 2020 1:00 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
4) Am I missing any other considerations?
One practical consideration for online purchases of Treasuries at auction vs. secondary market is that you can place an auction order at any time of day or night (it just doesn't get executed until the auction), but secondary market orders can only be placed during the day when the market is open. You can't place a Treasury purchase order at night to be executed the next morning, for example.

Because of this, I personally purchase most of my Treasuries at auction because I do most of my financial bookkeeping at night after work, and I don't like having to remember to log into Vanguard during the day to make a particular Treasury purchase.
Are you referring to both Treasury bond and bills? Or, just bills?

And, do you have any concern expressed elsewhere regarding Vanguard's spread?

Overall question....what should be my main concern from purchasing these weekly Treasuries at auction rather than keeping the money in the Treasury Money Market fund, which was only 87% Treasury Bills at the end of last month (and, I think can go down to 80%)?

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
Tortoise
Executive Member
Executive Member
Posts: 1698
Joined: Sat Nov 06, 2010 2:35 am

Re: Buying Treasury Bills from Vanguard today

Post by Tortoise » Wed Mar 18, 2020 2:39 pm

vnatale wrote:
Wed Mar 18, 2020 2:20 pm
Are you referring to both Treasury bond and bills? Or, just bills?
Both.
vnatale wrote: And, do you have any concern expressed elsewhere regarding Vanguard's spread?
No. I don't think I've ever seen a buy/sell spread on a Treasury bill or bond that concerned me much. The Treasury market is one of the most liquid in the world. Plus, I'm a buy-and-hold investor, so even if I do buy a bill or bond with a slightly increased spread, the amortized cost of that spread over my holding period is very small.
vnatale wrote: Overall question....what should be my main concern from purchasing these weekly Treasuries at auction rather than keeping the money in the Treasury Money Market fund, which was only 87% Treasury Bills at the end of last month (and, I think can go down to 80%)?
The weekly Treasury purchases will just be a bit less convenient since it'll require some routine weekly actions on your part.

Vanguard's Treasury MMF prospectus says it's allowed to invest up to 20% of the fund's assets in "securities issued by U.S. governmental agencies." Are those as safe as Treasuries? No. Are they a lot safer than commercial paper? I would think so.

Personally, I don't think you can really go wrong with either one -- Vanguard's Treasury MMF or directly held T-bills. The former is an A, the latter is an A+. Which one you choose depends on your personal trade-off between convenience and ability to sleep at night. I hold some of both.
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 2:48 pm

vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I have only owned money market funds and bond funds. Have never previously directly own any form of bond or a Treasury bill.

I hope to do so relatively soon this afternoon so am seeking any kinds of hints and answers to the following question.

Please don't refer me to searching for anything in the forum as that will then put me into endless research / analysis mode, which means it will not happen today.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund. I'm currently in both the Vanguard Federal and Treasury money market funds but they are not good enough for me because they refuse to commit to 100% Treasury bills only. I still have a ton invested in equities so taking a ton of risk there. The other side of this barbell is the cash investment. I want ZERO risk and am willing to accept ZERO return in return for no risk.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?

2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature

3) I'm going to insist that I am on the phone at all times with a Vanguard representative as I do this since I'll be doing it with at nine different Vanguard accounts and I have never prior done so. The big question is a. If I don't get a busy signal b. And, if I don't how long the hold will be to actually talk to anyone.

4) Am I missing any other considerations?

Thanks

Vinny
I'm logged into my Vanguard account. Not pleased that even after I was logged in they keep their phone number well hidden! I had to do an internet search to find out a number to call!

So far I've been on hold for 15 minutes.

And, for you Vanguard money market fans at home here are the latest yields...

Prime is paying 1.39%
Federal is paying 1.17%
Treasury is paying 1.29%

I may have successfully run out the clock for making a Treasury Bill purchase today? I'm not buying anything without having a Vanguard person guide me through this and answer all my questions. I've never done this before.

And, if they don't often soon I'm hanging up the phone and headed outside! Even though it's only 55 degrees out that is warm enough to be out in the sun, listening to music, and doing some work on my property. Will give a feeling of normalcy and totally away from all we've been (and will continue to be) experiencing.

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 2:51 pm

Tortoise wrote:
Wed Mar 18, 2020 2:39 pm
vnatale wrote:
Wed Mar 18, 2020 2:20 pm
Are you referring to both Treasury bond and bills? Or, just bills?
Both.
vnatale wrote: And, do you have any concern expressed elsewhere regarding Vanguard's spread?
No. I don't think I've ever seen a buy/sell spread on a Treasury bill or bond that concerned me much. The Treasury market is one of the most liquid in the world. Plus, I'm a buy-and-hold investor, so even if I do buy a bill or bond with a slightly increased spread, the amortized cost of that spread over my holding period is very small.
vnatale wrote: Overall question....what should be my main concern from purchasing these weekly Treasuries at auction rather than keeping the money in the Treasury Money Market fund, which was only 87% Treasury Bills at the end of last month (and, I think can go down to 80%)?
The weekly Treasury purchases will just be a bit less convenient since it'll require some routine weekly actions on your part.

Vanguard's Treasury MMF prospectus says it's allowed to invest up to 20% of the fund's assets in "securities issued by U.S. governmental agencies." Are those as safe as Treasuries? No. Are they a lot safer than commercial paper? I would think so.

Personally, I don't think you can really go wrong with either one -- Vanguard's Treasury MMF or directly held T-bills. The former is an A, the latter is an A+. Which one you choose depends on your personal trade-off between convenience and ability to sleep at night. I hold some of both.
At this point my questions strictly concern Treasury Bills. I'll no doubt have questions regarding the Treasury Bonds once I'm ready to buy them.

And, as I stated earlier I'm taking tremendous risk with all my equity investments. I want the most safe (in terms of return of principle) with ALL my cash investments. I just wish Vanguard had a money market option 100% devoted to Treasury bills so I would not have to buy them on my own.

Vinny
"I only regret that I have but one lap to give to my cats."
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Wed Mar 18, 2020 2:58 pm

vnatale wrote:
Wed Mar 18, 2020 2:48 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I have only owned money market funds and bond funds. Have never previously directly own any form of bond or a Treasury bill.

I hope to do so relatively soon this afternoon so am seeking any kinds of hints and answers to the following question.

Please don't refer me to searching for anything in the forum as that will then put me into endless research / analysis mode, which means it will not happen today.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund. I'm currently in both the Vanguard Federal and Treasury money market funds but they are not good enough for me because they refuse to commit to 100% Treasury bills only. I still have a ton invested in equities so taking a ton of risk there. The other side of this barbell is the cash investment. I want ZERO risk and am willing to accept ZERO return in return for no risk.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?

2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature

3) I'm going to insist that I am on the phone at all times with a Vanguard representative as I do this since I'll be doing it with at nine different Vanguard accounts and I have never prior done so. The big question is a. If I don't get a busy signal b. And, if I don't how long the hold will be to actually talk to anyone.

4) Am I missing any other considerations?

Thanks

Vinny
I'm logged into my Vanguard account. Not pleased that even after I was logged in they keep their phone number well hidden! I had to do an internet search to find out a number to call!

So far I've been on hold for 15 minutes.

And, for you Vanguard money market fans at home here are the latest yields...

Prime is paying 1.39%
Federal is paying 1.17%
Treasury is paying 1.29%

I may have successfully run out the clock for making a Treasury Bill purchase today? I'm not buying anything without having a Vanguard person guide me through this and answer all my questions. I've never done this before.

And, if they don't often soon I'm hanging up the phone and headed outside! Even though it's only 55 degrees out that is warm enough to be out in the sun, listening to music, and doing some work on my property. Will give a feeling of normalcy and totally away from all we've been (and will continue to be) experiencing.

Vinny
I've now been on hold for 24 minutes with getting nowhere with them. It's clear that having a significant amount of investment with them gets ZERO extra priority than someone with a $200 SIMPLE IRA with their employer. Everyone is in the same line.

After this terrible customer support (and what I experienced with them last December in setting up our organization's SIMPLE IRA) I have ZERO loyalty remaining to them and, at some point in the future, Fidelity will be half the money that is currently at Vanguard. Unless any of you are going to tell me that they can be just as poor at customer service!

I've finished this post. I'm hanging up after this 27 minute hold and going outside!

VInny
"I only regret that I have but one lap to give to my cats."
User avatar
technovelist
Executive Member
Executive Member
Posts: 6275
Joined: Wed Sep 15, 2010 11:20 pm

Re: Buying Treasury Bills from Vanguard today

Post by technovelist » Thu Mar 19, 2020 9:15 am

vnatale wrote:
Wed Mar 18, 2020 2:58 pm
vnatale wrote:
Wed Mar 18, 2020 2:48 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I have only owned money market funds and bond funds. Have never previously directly own any form of bond or a Treasury bill.

I hope to do so relatively soon this afternoon so am seeking any kinds of hints and answers to the following question.

Please don't refer me to searching for anything in the forum as that will then put me into endless research / analysis mode, which means it will not happen today.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund. I'm currently in both the Vanguard Federal and Treasury money market funds but they are not good enough for me because they refuse to commit to 100% Treasury bills only. I still have a ton invested in equities so taking a ton of risk there. The other side of this barbell is the cash investment. I want ZERO risk and am willing to accept ZERO return in return for no risk.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?

2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature

3) I'm going to insist that I am on the phone at all times with a Vanguard representative as I do this since I'll be doing it with at nine different Vanguard accounts and I have never prior done so. The big question is a. If I don't get a busy signal b. And, if I don't how long the hold will be to actually talk to anyone.

4) Am I missing any other considerations?

Thanks

Vinny
I'm logged into my Vanguard account. Not pleased that even after I was logged in they keep their phone number well hidden! I had to do an internet search to find out a number to call!

So far I've been on hold for 15 minutes.

And, for you Vanguard money market fans at home here are the latest yields...

Prime is paying 1.39%
Federal is paying 1.17%
Treasury is paying 1.29%

I may have successfully run out the clock for making a Treasury Bill purchase today? I'm not buying anything without having a Vanguard person guide me through this and answer all my questions. I've never done this before.

And, if they don't often soon I'm hanging up the phone and headed outside! Even though it's only 55 degrees out that is warm enough to be out in the sun, listening to music, and doing some work on my property. Will give a feeling of normalcy and totally away from all we've been (and will continue to be) experiencing.

Vinny
I've now been on hold for 24 minutes with getting nowhere with them. It's clear that having a significant amount of investment with them gets ZERO extra priority than someone with a $200 SIMPLE IRA with their employer. Everyone is in the same line.

After this terrible customer support (and what I experienced with them last December in setting up our organization's SIMPLE IRA) I have ZERO loyalty remaining to them and, at some point in the future, Fidelity will be half the money that is currently at Vanguard. Unless any of you are going to tell me that they can be just as poor at customer service!

I've finished this post. I'm hanging up after this 27 minute hold and going outside!

VInny
PUT YOUR SHOES ON!
User avatar
vnatale
Executive Member
Executive Member
Posts: 3180
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: Buying Treasury Bills from Vanguard today

Post by vnatale » Thu Mar 19, 2020 12:04 pm

technovelist wrote:
Thu Mar 19, 2020 9:15 am
vnatale wrote:
Wed Mar 18, 2020 2:58 pm
vnatale wrote:
Wed Mar 18, 2020 2:48 pm
vnatale wrote:
Wed Mar 18, 2020 12:14 pm
I am trying to follow through and convert all my present money market holdings with Vanguard to directly owning Treasury Bills.

I have only owned money market funds and bond funds. Have never previously directly own any form of bond or a Treasury bill.

I hope to do so relatively soon this afternoon so am seeking any kinds of hints and answers to the following question.

Please don't refer me to searching for anything in the forum as that will then put me into endless research / analysis mode, which means it will not happen today.

I want to buy weekly Treasury bills so as to as closely as possible mimic a Treasury bill only money market fund. I'm currently in both the Vanguard Federal and Treasury money market funds but they are not good enough for me because they refuse to commit to 100% Treasury bills only. I still have a ton invested in equities so taking a ton of risk there. The other side of this barbell is the cash investment. I want ZERO risk and am willing to accept ZERO return in return for no risk.

1) Do you advise buying at auction or on secondary? And, what is the risk for either method and the differences between them? I'd not imagine a lot since they are the shortest of the short-term bonds?

2) It seems from all I have read in the forum that unlike Fidelity Vanguard has no auto roll feature

3) I'm going to insist that I am on the phone at all times with a Vanguard representative as I do this since I'll be doing it with at nine different Vanguard accounts and I have never prior done so. The big question is a. If I don't get a busy signal b. And, if I don't how long the hold will be to actually talk to anyone.

4) Am I missing any other considerations?

Thanks

Vinny
I'm logged into my Vanguard account. Not pleased that even after I was logged in they keep their phone number well hidden! I had to do an internet search to find out a number to call!

So far I've been on hold for 15 minutes.

And, for you Vanguard money market fans at home here are the latest yields...

Prime is paying 1.39%
Federal is paying 1.17%
Treasury is paying 1.29%

I may have successfully run out the clock for making a Treasury Bill purchase today? I'm not buying anything without having a Vanguard person guide me through this and answer all my questions. I've never done this before.

And, if they don't often soon I'm hanging up the phone and headed outside! Even though it's only 55 degrees out that is warm enough to be out in the sun, listening to music, and doing some work on my property. Will give a feeling of normalcy and totally away from all we've been (and will continue to be) experiencing.

Vinny
I've now been on hold for 24 minutes with getting nowhere with them. It's clear that having a significant amount of investment with them gets ZERO extra priority than someone with a $200 SIMPLE IRA with their employer. Everyone is in the same line.

After this terrible customer support (and what I experienced with them last December in setting up our organization's SIMPLE IRA) I have ZERO loyalty remaining to them and, at some point in the future, Fidelity will be half the money that is currently at Vanguard. Unless any of you are going to tell me that they can be just as poor at customer service!

I've finished this post. I'm hanging up after this 27 minute hold and going outside!

VInny
PUT YOUR SHOES ON!
I will! Next time I go out. Hopefully tomorrow. It's supposed to be 70 degrees.

Vinny
"I only regret that I have but one lap to give to my cats."
Post Reply