Started looking at 20 year bonds yielding 4% range. Some with good coupons also looking at zero coupon.

Theoretically I will hold to maturity.

If we do hit environment where rates drop again will one be more valuable then the other

I am thinking theoritically they will be equal

This post was edited on 3/9/23 at 10:09 pm

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Posted by slackster

Houston

Member since Mar 2009

91500 posts

Posted on 3/10/23 at 6:19 am to thelawnwranglers

All else being equal, the higher the coupon, the lower the sensitivity to interest rate moves. That should make sense intuitively too - the faster you get your money, the faster you can reinvest it at the prevailing market rate.

This post was edited on 3/10/23 at 6:46 am

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Posted by Shepherd88

Member since Dec 2013

4905 posts

Posted on 3/10/23 at 7:11 am to thelawnwranglers

If you live in a state with state tax income then you’ll be foregoing the state tax exempt interest part of a treasury if you put it in an trad ira.

This post was edited on 3/10/23 at 7:12 am

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Posted by thelawnwranglers

Member since Sep 2007

42232 posts

Posted on 3/10/23 at 7:43 am to slackster

quote:
else being equal, the higher the coupon, the lower the sensitivity to interest rate moves. That should make sense intuitively too - the faster you get your money, the faster you can reinvest it at the prevailing market rate.

Thanks yeah that makes sense

I might roll bond short term again then look long term

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Posted by thelawnwranglers

Member since Sep 2007

42232 posts

Posted on 3/10/23 at 8:04 am to Shepherd88

quote:
If you live in a state with state tax income then you’ll be foregoing the state tax exempt interest part of a treasury if you put it in an trad ira.

Well majority of money is IRA

I don't see much premium on taxable interest products to address risk

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