Best "Safe" Fixed Income Investments Of 2023

w00d00w | Dec 20, 2023 | 360 posts since 2012

2023 was a good year for savers with the Fed funds rate continuing to rise from 4.5% to 5.5% while trailing 12 month CPI-U inflation fell from 6.4% to 3.9%. that combination resulted in positive real returns once again on many safe investments. Some of the peaks reached during the year included the 10 year Treasury at 5%, long term TIPS with real yields of 2.7%, and CDs reaching 6%. In your financial situation, where during the course of the year did you find the best opportunities for safe money investment?

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MAKNYC | Dec 20, 2023 | 323 posts since 2015

I was able to pick up many incredibly solid municipals well into the 5%’s. All were solid credits of AA+ or higher by at least two rating agencies. As I live in Texas I could purchase any jurisdiction and not worry about state/local taxes and the rate is locked in for 15-20 years with a small deferred tax liability when redeemed/sold for the amortization of the discounts.

sams1985 | Dec 20, 2023 | 781 posts since 2022

Correct me if I'm wrong, but I think the Advancial 60 month 5.4% was the peak rate for long term(5 year+) so far this cycle for a nationally available CD. Prob about equal to when the 5 year treasury auctioned at 4.9% on 10/31(depending on your income tax state). Very happy I was able to sell brokered Cd's and max that one out, it's the current crown jewel in my fixed income portfolio.

I do vaguely remember a few months back there was a local credit union in Texas that had something similar and maybe Wildfire credit union had a 5.5% 59 month local deal at one point.

Sometimes,you just get lucky with timing. Even though brokered CD's are supposedly considered less liquid, i was able to sell most at Par or above except for a 4.3 60 month where i lost $200. If i had to sell conventional CD's and eat the penalty, i would have been looking at $10-12k EWP.

txFish1 | Dec 20, 2023 | 476 posts since 2023

sams1985 You may be referring to the Mobility Credit Union in Texas 5 year 5.59% APY CD earlier in the year. I was very lucky as they have a branch just north of Dallas and I was able to lock in this particular issue but they were not Nationwide available. Also I was able to get some of the Advancial 5.40% 5 year CD's that you mentioned.

sams1985 | Dec 20, 2023 | 781 posts since 2022

Yes! Thank you, that was the one, Texas residents only with no loopholes. Considering you picked up both, you did quite well this rate cycle. Congrats. (although I should say "so far this cycle" since we haven't seen that first rate cut so it's not over yet)

chill08 | Dec 21, 2023 | 96 posts since 2022

I was also able to take advantage of Mobility 60 month 5.59% and Advancial 5.40%. I’m bracing for what’s coming in 2024.

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