'Buy A T-Bill And Chill': Bond King Jeffrey Gundlach Says He's Happier As A Bond Investor Now — Here's How To Get In On The Action

When interest rates were low, it was difficult for bond investors to earn a decent yield.

Just ask DoubleLine Capital Founder Jeffrey Gundlach.

Speaking at a recent investment conference in New York, Gundlach recalled what the bond market was like in 2016. He said if you wanted to earn a 5% annual yield on a bond portfolio in those days, you had to buy a junk bond index, use leverage to boost returns and pray that issuers wouldn't default.

Things have changed dramatically since then.

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Bond yields have been surging. While high borrowing costs could slow the economy, it also means that investors can potentially earn higher returns on fixed-income investments.

Gundlach said that he's "much happier" with bonds today than in 2016.

"Now you can buy a T-bill and chill," he said.

Treasury bills, or T-bills, are short-term debt obligations issued by the U.S. Department of the Treasury. They're considered among the safest investments because they are backed by the full faith and credit of the U.S. government.

Among the different types of government-issued securities, T-bills have the shortest maturity at one year or less.

The yield on the one-year Treasury bill stood at 5.47% on Oct. 19.

Investing In T-Bills

Compared to the hottest tickers in the stock market, T-bills may seem a bit boring. But remember, T-bills are backed by the U.S. government and are considered among the safest investments globally in terms of credit risk.

Because of their short-term nature, T-bills are less sensitive to interest rate fluctuations, making them less susceptible to interest rate risk.

Gundlach knows about bonds. Over the years, his uncanny ability to predict trends and make profitable decisions in the bond market has earned him the moniker Bond King. 

If you want to follow the Bond King's suggestion and "buy a T-bill and chill," there are several ways to do it.

One of the most direct methods is through TreasuryDirect, an online platform offered by the U.S. Department of the Treasury, where people can purchase T-bills directly from the government.

Alternatively, many brokerage firms allow clients to buy T-bills either in competitive or noncompetitive bidding processes. Certain banks and financial institutions also might offer the option for their customers to invest in T-bills, so check with your local branch to explore available opportunities. Just make sure that you understand the maturity terms and associated fees before making a purchase.

Exchange-traded funds (ETFs) can provide another way for investors to gain exposure to T-bills.  By investing in ETFs, you can access the performance of a basket of T-bills without having to buy each one individually. This method also provides the convenience of trading, as ETFs can be bought and sold on stock exchanges just like individual stocks.

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