The Same Yield Can Mean Different Things
When I compare fixed-rate positions, one of the first things I check is maturity.
A 10% return over one year is very different from 10% over six months.
The rate is the same on paper, but my capital is committed for a different amount of time.
That’s why when I look at TermMax FT, I don’t stop at the APY.
I also ask:
“When does this position mature?”
With FT, the return comes from the difference between the purchase price and the redemption value at maturity.
So I wouldn’t automatically consider the higher annualized return the better option.
It may come with a shorter maturity.
A lower rate could mean keeping capital committed for longer.
For me, this is one of the key things to check when comparing fixed-rate opportunities.
The rate tells me the return.
Maturity tells me the time I’m paying for it.
Both matter.
#termmax @TermMax
When I compare fixed-rate positions, one of the first things I check is maturity.
A 10% return over one year is very different from 10% over six months.
The rate is the same on paper, but my capital is committed for a different amount of time.
That’s why when I look at TermMax FT, I don’t stop at the APY.
I also ask:
“When does this position mature?”
With FT, the return comes from the difference between the purchase price and the redemption value at maturity.
So I wouldn’t automatically consider the higher annualized return the better option.
It may come with a shorter maturity.
A lower rate could mean keeping capital committed for longer.
For me, this is one of the key things to check when comparing fixed-rate opportunities.
The rate tells me the return.
Maturity tells me the time I’m paying for it.
Both matter.
#termmax @TermMax