The spike in short-term Treasury yields may cause some investors to consider adding notes to their portfolios. The yield on the 2-year Treasury rose more than 3.9% on Friday, the highest level since 2007. Bond yields move inversely to their prices. The 2-year note is at the point on the Treasury yield curve that is most sensitive to rate hikes by the Federal Reserve, which is expected to raise rates for the fifth time this year next week in an effort to tame inflation. The Consumer Price Index rose 0.1% in August. Economists polled by the Dow Jones expected a 0.1% decline. Because of the inverted yield curve, short-term notes now have higher yields than longer-term notes. Bond King Jeffrey Gundlach, CEO of DoubleLine Capital, said in a webcast Thursday that after several brutal years, the bond market is now . “In my view, the opportunities are more exciting now than at any time in the last 10 years,” he said. Gundlach’s firm bought longer-term Treasuries last week. CNBC’s Jim Cramer, on the other hand, this week bought 2-year Treasury notes for his personal portfolio. For the first time in a long time, returns are more competitive with stock returns, he said. With short-term notes, investors can get higher returns without making a long-term commitment. For those looking to get a piece of the action, here’s what you need to know. Buying from the Government You can buy Treasuries directly from the US government through its website, TreasuryDirect.gov. You will need to set up an account and link your bank to the website. Notes are sold in $100 increments and are usually issued within a week of the auction date. Auctions for 2-, 3-, 5- and 7-year Treasuries take place every 4 weeks, while 10-year auctions are quarterly. Buying notes makes it easy to plan for income. “If you buy an individual Treasury and hold it until maturity, you know what your interest will be and you know what your maturity value will be,” said chartered financial analyst Tim Utek, chief investment officer at Jacksonville-based Life Planning Partners. Is.” , Florida. “You know exactly what you’re going to get.” You will get interest paid twice a year and if you hold the Treasury until it matures, you are not exposed to market risk. The downside of owning a security rather than investing in a Treasury fund is the lack of diversification, unless you are creating the bonds yourself. You also need to make sure that you buy the right Treasury based on your objectives and time frame. Dihan Lassus, certified financial planner managing principal at Peepack Private Wealth Management in New Providence, New Jersey, said investments are different from your other accounts, too. “For people who want to watch everything at once, it’s a little more difficult,” she said. You also can’t buy them in your IRA or Roth IRA, which Lassus thinks is the biggest downside. If you want to sell the bond before it reaches maturity, you cannot do it on the government website. Instead, you have to transfer it to a bank, broker or dealer. Buying through a brokerage You can also buy Treasury notes on the secondary market through a brokerage firm. You will still get all the benefits of owning the security directly. For Utech, this is the easiest way to buy bonds, calling the government website “a bit cumbersome.” He said online brokers like Fidelity and Charles Schwab have tables that list yields on different Treasuries, so you can compare products. In addition to offering secondary-market bonds, both Fidelity and Schwab sell new issue Treasuries. Also note that you can’t get the exact time horizon on the note on any secondary Treasury purchase, Utech said. Be sure to check any minimum purchase requirements and fees involved. For example, at Schwab and Fidelity, Treasury is free to buy online, but broker-assisted trading is $25 and $19.95, respectively. At Fidelity, the minimum purchase for Treasury notes is $1,000. What Lassus likes about going through a brokerage is the fact that you have the ability to put all of your investments together and you can even combine them into an IRA or a Roth IRA, she said. Investing in a Fund You can also get exposure to the bond market through mutual funds and exchange-traded funds. “It provides immediate diversification,” Lassus said. For example, a short-term Treasury bond fund may have issues with maturity between one and three years. You can purchase them through your brokerage, which should make it easier to track performance along with the rest of your holdings. See below for four short-term Treasury funds. However, in this way the fund price may fluctuate in a year and you are likely to lose. In addition, income payments can fluctuate as you have different bonds in the fund. Be aware of any fees involved that may be deducted from your return. Funds have even turnover and are therefore subject to capital gains tax, unlike individual bonds.