Where to hold cash.

[CorpRaider]

I've looked at MINT and GSY.  But haven't gotten comfortable enough to put any cash there.

[giofranchi]

Just looking out for ya man!

 

Yes I know, Paul! Thank you!

Just let me ask you this: for what I see SHV has 19 holdings, with percentages that vary from more than 33% to less than 3%... Why? What do you think I should do? To put all the cash in the treasury note weighting 33% and forget about the rest? Or should I diversify a bit… like SHV does?

I ask you because I am not familiar with bonds investing… And all I want is the easiest way to hold cash denominated in USD.

I understand your warning, and it certainly is right! But (call me lazy!!) I think also the so-called “brain damage” should be considered… shouldn’t it?

 

Gio

 

[merkhet]

There's really no reason to diversify your Treasuries as there is zero repayment risk associated with your principal. The most important things to remember when you're buying your Treasuries is not to pay over par and keep it short-term.

[giofranchi]

There's really no reason to diversify your Treasuries as there is zero repayment risk associated with your principal. The most important thing to remember when you're buying your Treasuries is not to pay over par.

 

Ok! Thank you!

And one more thing, if you don't mind: the weighted average maturity of SHV is 0.38 yrs. If I buy directly a treasury note with the same duration, it means that every 4.5 months it will be redeemed, won't it? Therefore, I'll need to buy a new one... Am I right?

 

Gio

[Guest ajc]

 

This write-up argues for WLRH.

 

http://brooklyninvestor.blogspot.co.uk/2014/08/wl-ross-holding-corp-wlrh.html

 

 

 

[merkhet]

There's really no reason to diversify your Treasuries as there is zero repayment risk associated with your principal. The most important thing to remember when you're buying your Treasuries is not to pay over par.

 

Ok! Thank you!

And one more thing, if you don't mind: the weighted average maturity of SHV is 0.38 yrs. If I buy directly a treasury note with the same duration, it means that every 4.5 months it will be redeemed, won't it? Therefore, I'll need to buy a new one... Am I right?

 

Gio

 

Yes, you'll need to roll your Treasuries as they mature, but (someone correct me if there's some esoteric way to do this) you can't really buy a 4.5 month Treasury. Personally, so long as I don't have to pay too much in commission, I'd just buy as short a maturity as possible.

[giofranchi]

Yes, you'll need to roll your Treasuries as they mature, but (someone correct me if there's some esoteric way to do this) you can't really buy a 4.5 month Treasury. Personally, so long as I don't have to pay too much in commission, I'd just buy as short a maturity as possible.

 

Great! Thank you! :)

 

Gio

[merkhet]

Gio,

 

Alternatively, if you just want an easy set it and forget it method, can you just hold USD? That way you pay whatever FX commission you need to pay once, and you're done.

[giofranchi]

Gio,

 

Alternatively, if you just want an easy set it and forget it method, can you just hold USD? That way you pay whatever FX commission you need to pay once, and you're done.

 

Well, that of course would be the best solution.

Unfortunately Banca Intesa doesn’t allow me to have a USD account. Other banks give their clients such a possibility… But I am generally fine with Banca Intesa, and wouldn’t change it only for this reason.

 

Gio

 

[stahleyp]

There's really no reason to diversify your Treasuries as there is zero repayment risk associated with your principal. The most important thing to remember when you're buying your Treasuries is not to pay over par.

 

Ok! Thank you!

And one more thing, if you don't mind: the weighted average maturity of SHV is 0.38 yrs. If I buy directly a treasury note with the same duration, it means that every 4.5 months it will be redeemed, won't it? Therefore, I'll need to buy a new one... Am I right?

 

Gio

 

Merkhat is right. The only reason to diversify treasuries is to play interest rates. If all you have is short term, one is just as good as another.

 

You bank should be able to "roll" treasuries. You could buy a 3 month and just keep rolling it.

 

At the end of the day, gio, being lazy about certain things isn't the worst thing. Is what you're doing the optimal way of doing things, assuming that "optimal way" meant highest return and lowest risk? no. However, you're busy so the value of your time of learning how the bond market works and setting this up also has to be taken into consideration. Unless you have a huge chuck in the ETF, realistically, it probably isn't worth your time - assuming your comfortable with the slight (very) additional risk and slightly lower return.