Make Your Cash Get A Job: SGOV

Core Viewpoint - The iShares 0-3 Month Treasury Bond ETF (SGOV) is highlighted as a favorable investment option for those seeking dividends and stability, particularly in the context of short-term Treasury investments. Dividends - SGOV is primarily attractive for its dividends, which are derived from short-term Treasuries, offering better tax treatment compared to corporate bonds for most Americans [2] - The ETF has a low expense ratio of 0.09%, making it competitive in its category [2] - Recent trends indicate a dip in dividends due to reduced short-term rates, which affects the yield from new Treasury bill purchases [4][7] Price Stability - The price of SGOV remains stable, with minimal volatility, primarily influenced by dividend accrual and payout schedules [5][12] - Historical data shows that prior to 2022, price movements were less pronounced due to low short-term rates, resulting in a more stable dividend environment [8] Investment Strategy - SGOV is positioned as a cash alternative rather than a traditional investment, emphasizing its liquidity and attractive yield [12] - The company suggests that holding cash in checking accounts may lead to missed opportunities for earning interest, advocating for the use of Treasury bill ETFs instead [9][16] Idle Cash Management - The company categorizes idle cash into three types and recommends investing excess cash in Treasury bill ETFs to maximize interest earnings [15][16] - It highlights the potential loss of over $1,000 in interest annually for those holding significant cash balances in low-interest checking accounts [16]