Wealth management nerd's new path to wealth growth, with a maximum yield of over 5.0%

The financial management market over the past few years has generally given people the impression that it is a mess. Every now and then, runaway news pops up. The stock market has plummeted, and the wealth management yield of major banks, institutions, etc. has declined, all making people feel like they don't know how to manage money. But in reality, no matter how the market changes, you still have a choice; you just don't understand it. Today, let's expand your knowledge in one issue.

Over the past few days, friends have been asking about US debt. After the Federal Reserve postponed interest rate cuts, everyone's expectations for interest rate cuts are high. I always feel that interest rate cuts are coming soon. This is also the reason why many people are paying attention to US debt recently. Everyone is expecting US debt to rise after interest rate cuts. Today, let me share with you what US debt is? How's the revenue? Who is it for? How to buy US bonds?

“US Treasury bonds” refer to the large amount of capital required by the US government to continuously stimulate the country's economy, and raise funds from investors through the issuance of bonds. When bonds issued by the US government are purchased by investors, we call them “US Treasury bonds.” When you buy US debt, you are lending money to the US government, let them use your money for construction, and then give you interest.

I looked at the US government's official website. The 30-year US Treasury yield is 4.625%, and the 10-year yield is 4.375%.

Looking at the bulls and Futubull, the 2-year yield is 4.833%, and the 5-year and 10-year yield is around 4.4. Of all bonds, US bonds have the highest yield.

Conservative investors seek lower risk and stable returns.

Pursue a stable income and rely on daily income for daily expenses or pensions.

Long-term investors, holding for a longer period of time, are beneficial to their liquidity and interest income.

Proceeds from purchasing US Treasury bonds mainly consist of 2 parts. One is receiving interest income, and the other is the transaction price difference, which allows you to buy low and sell high. Depending on the term, US Treasury bonds can be divided into short-term bonds (U.S. Treasury Bills, T-Bills for short), 1 to 3 years. Medium-term bonds (U.S. Treasury Notes, T-Notes for short) 4 to 10 years; long-term Treasury Inflation Protected Securities, TIPS, 10 to 20 years, and (U.S. Treasury Bonds, T-Bonds for short) 10 to 30 years.

For example: buy a bond for 1,000 yuan, the interest rate is 5%, and it expires after 3 years. Investors will receive 50 yuan in debt interest in the first year, 50 yuan in debt interest in the second year, and 50 yuan in debt interest after maturity in the third year. Plus the bond value of 1,000 yuan, that is, the principal amount of the bond, a total of 1,150 yuan will be recovered.

At the time of issuing the bond, the issuer agreed to pay the 1,150 yuan, and investors will receive interest on the bond every year and recover the face value when the bond matures. However, due to factors such as bond ratings and interest rates, bond prices are determined by the market. Yield to maturity (yield to maturity) is used to measure the return on buying bonds at different prices.

If you buy a bond for 950 yuan, the yield to maturity (yield to maturity) is 6.9%, which is higher than 5% when the bond value is 1,000 yuan. If you buy a bond at 1,100 yuan, the yield to maturity (yield to maturity) is only 1.6%.

US Treasury bonds are the safest national bonds in the world, mainly because the US is the world's largest economy. Unless the US country goes bankrupt, US Treasury bonds are generally regarded as bonds that “will never default.”

If you buy “US bonds” directly, you can purchase US Treasury bonds of various maturities through overseas brokerage platforms, such as Firstrade (Firstrade), Futu, Yingtou Securities (IBKR), Carson Wealth Management, FT, Tiger, etc. If you want to buy with these brokerage firms, you need to have a US stock account. For example, Carson Wealth Management is a world-renowned investment brokerage firm. If you open an account with Carson Wealth Management, you can get a bank account with the same name. You can invest in US stocks and bonds by depositing USDT to the multi-asset wallet BiyaPay and then withdrawing fiat money to Jiaxin Securities. BiyaPay has been authorized by the US Securities Regulatory Commission, and they have also started a US stock investment business. You can also directly search US stock codes and buy US stocks on BiyaPay.

Their US and Hong Kong stock brokerage firms are difficult to deposit and withdraw. You can deposit and withdraw USDT to your US and Hong Kong stock bank accounts, and BiyaPay's US and Hong Kong stock deposits and withdrawals can achieve same-day withdrawals, with no limit. Their customers experienced a single deposit of 3 million to Jiaxin Securities. The deposit to Jiaxin Securities also supports both wire transfer and ACH methods. There is no need to open an additional bank account. ACH deposit banks have zero processing fees, and basically achieve same-day deposit and same-day delivery.

If you have an offshore bank account in Hong Kong or the US, withdrawing funds from BiyaPay to other brokerage firms such as Futu, Yingtou, and Tiger is also super fast, and the amount is also unlimited. Basically, same-day remittance is delivered on the same day.

“US Treasury Fund”: Domestic users can purchase through bank QDII, such as Bank of China, HSBC, etc. Standard Chartered Bank no longer has a purchase quota for QDII. A bond fund works in a similar way to a regular fund. Note that bond funds usually have fixed dividends, so they are also known as “fixed income funds.” When purchasing a bond fund, factors to consider include (but are not limited to) the fund's market price, read the fund's disclosure statement (Prospectus) to understand the fund's internal management model, management fees, and other relevant information.

A “bond ETF” refers to a fund that can be traded on an exchange. ETF products containing various bond combinations can be purchased through brokerage platforms.

If you have US status, you can buy treasury bonds directly from the US government's official website.

If you want to buy US bond funds domestically, you can go to the bank for advice. Generally, transactions are carried out through the bank's QDII (Qualified Domestic Investors). Below is the (QDII) approval quota status table for qualified domestic institutional investors. As can be seen, HSBC is in the lead with US$4.610 billion, followed by Citibank and Bank of China.

In addition to products linked to US bonds, there are also many funds linked to US technology companies that basically have good returns.

If you want to buy US bonds through a bank in Hong Kong, you generally need to start with 100,000 US dollars, and you also need additional proof of investor assets to open a bond account for you.

Finally, liquidity in the US bond market is expected to be supported, further providing investors with better prospects.

The US market will be closed this Monday due to the Memorial Day holiday. After two days, the above repurchase will commence. Through a series of weekly operations planned until the end of July, the US Treasury will buy some existing government bonds, that is, buy old bonds and eventually replace them with large current issuances, with the aim of enhancing the convenience of transactions, since old bonds usually have the least liquidity.

The liquidity of the US Treasury bond market has been challenged many times in recent years, but it has improved since this year. J.P. Morgan Chase's market depth index, which measures liquidity in the bond market, has now returned to the level before the Federal Reserve began its interest rate hike cycle in early 2022, although it is still about 45% lower than the average of the past ten years.

The QT reduction, which is expected to begin in June, will also provide support. The Federal Reserve announced at this month's interest rate meeting that starting in June, the Federal Reserve will lower the upper limit of US Treasury bonds that are not reinvested after monthly maturity from 60 billion US dollars to 25 billion US dollars, and the upper limit of mortgage-backed securities (MBS) will remain unchanged at 35 billion US dollars. As for the future of the US bond market, although the yield of the benchmark 10-year US bond was recently reported at around 4.46%, which is significantly lower than the peak of 5% in October last year, some investors believe that since volatility has declined markedly, 10-year US bonds are still attractive.