I wrote a post about having to manage many “money calendars” and that process has now become more intense especially as I travel through Europe, Middle East and Asia this Fall. I have now added a ‘travel’ calendar to my calendar portfolio.
One of the things I have been dreading is getting some of my bonds called. Back in October of 2024, I had a high yielding 6.8 percent bond get called. I got all my money back and the accrued interest up to that day but the bond was bought back and I had to re-invest at lower rates.
I ended up buying two bonds in a similar pool of Federal Home Loan bonds, a quasi-government agency that issues loans. The rates I got with the bonds are 5.78% and 5.91%, respectively. I have been collecting interest but both bonds have a call date of September 19, 2025 and with rates dropping, I suspect they will likely be called.
The total value of the bonds is $25,000 so I’ll need to find something new and with bond rates going down, it may be a bit more difficult to earn a decent rate of return.
Interestingly, my municipal bond ETFs have risen in value with rates dropping just as I expected so there is some good news. Those munis are callable as well but they usually have a 5 year window and many I have bought over the last couple of years.
The most worrying part is if rates go back down to 3 percent. Low rates stoke inflation, punish savers and causes asset bubble speculation. This is the reason I am now collaring my trades. I won’t earn as much but I won’t lose money either.
I will post a follow up on September 20 on where this ends.
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