The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Dry Powder or Vwitx?||Date: 1/14/2012 11:03 AM|
|Author: codger41||Number: 33583 of 35527|
I have $100K plus in an taxable FIDC insured account paying only a nominal interest rate. This money has been held by me as "dry powder" to be invested should a bear market make selected dividend stocks more attractive. The question is "Where can I park this money while awaiting attractive entry points?".
I am looking at Vanguard Intermediate Term Tax free bond fund (VWITX).
Salient facts are a 9%+ 2011 total return and a positive return most years (2008 was about break even). Bonds in the fund have an average maturity of 5.7 years and the fund is producing a 3.5% tax free yield. Turnover is 15% and management expense a mere .20 . My Federal tax bracket on incremental dollars is 28%.
Vwitx pays dividends monthly. By watching the fund price and dividend closely I feel that I should be able to get out of the investment in a timely manner should things turn south.
I have IRAs with dividend stocks, taxable bond funds and balanced mutual
funds, all tax advantaged (first RMD will be required this tax year).
I think that VWITX is a lower risk investment and a suitable place for
otherwise taxable dollars. Am I missing something here?
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|