No. of Recommendations: 1
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?

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.