Saturday, November 21, 2009

Fixed Income & Vangaurd Fund Update

Rates and Yields for Series EE Bonds, I-Bonds, VIPSX, VBMFX, VFIIX (GNMA or "Ginnie Mae") and VTSMX funds from Vanguard.

On 9/18/09 I sold the last of my explore portfolio position in Vanguard’s GNMA fund (VIIX Charts) to lock in nice gains. If ECRI is wrong and the economy falls into a depression, then we will regret selling these bond funds because they will go higher.

On 10/26/09 I bought $31,250 worth of 5-Year TIPS for the "explore portfolio" in "Kirk Lindstrom's Investment Letter" and those are up 1.9% in less than a month as expected inflation surged while ECRI's FIG remains very low.

Vanguard Comparison Table

Vanguard Fund (11/21/09)

SYMBOL

Yield

YTD

GNMA (Currently part of my explore portfolio)

VFIIX

3.09%

6.40%

Total Bond Index

VBMFX

3.30%

7.02%

Prime Money Market Fund

VMMXX

0.11%

0.52%

Inflation Protected Security Fund

VIPSX

0.89%

12.29%

Total Stock Market Index Fund

VTSMX

1.78%

24.08%

Series I Bonds & E Bonds

  • New I Bonds currently pay 3.36% for 6 months after purchase with a base rate of 0.30%.
  • Series EE bonds now pay 1.20% total rate through April 30, 2010.

These rates for new i-bonds are effective from November 1, 2009 through April 30, 2010.

On November 6, 2006 Lakshman Achuthan, managing director of ECRI, said "While the USFIG remains in a cyclical upturn, indicating a further dissipation of any deflation danger, we are not on the verge of an upsurge in U.S. inflation."

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