No. of Recommendations: 6
Hello

Thank you for the information provided on this board.

I thought it interesting that last Friday I tried to set up a 4 year CD ladder at Vanguard in a Rollover IRA. I asked for 2,3,4,and 5 year CDs, new issue, FDIC insured, paying monthly. They had some 2 and 4 year availability but no 3 or 5 year CDs available at all. None. The rep said that there had been a run on CDs at Vanguard in the last 3 weeks, and he suggested calling on Tuesday mornings when they get their new CD offerings. Of course, the highest paying CDs are the first to go.

As of today, I have 2, 3, and 4 year CDs each paying 5.05%. Not great, but OK.

Just thought I'd pass it along. Tuesday is best availability at Vanguard bond desk and there seems to be higher than normal demand.

Regards ... L
Print the post Back To Top
No. of Recommendations: 0
I just checked to make sure that my purchase of 5-year brokered CDs about a week ago actually went through (at 5.2%/5.26% APY). It did, but I had made the mistake of putting off a transaction for a couple of days, since the issue date wasn't until a few days later, getting CDs from somewhere else for the same yield and was shocked to see they were gone (something like $250,000 worth eaten up in 2 days). I was lucky something else came up.

I think there must be a lot more Vanguard clients trying to grab CDs, which are now clearly to soup de jour, than we realized. Thanks for the Tuesday tip.
Print the post Back To Top
No. of Recommendations: 1
Lokicious

You have the patience of Job?/Jobe? regarding the other thread. I don't know how you do it. But thank you. I have read in a lurking mode for several years and certainly know where to come when I have questions.

Re a 4 year CD ladder (and 1 year MM). It equals 5 year expenses. In our case newly retired, it is protecting against a drop in MM rates going forward. I'd rather protect the downside at this point. Lock it in even at 5.05%.

Previously, MM allowed me flexibility to buy what appeared to be undervalued.

Going forward, CDs provide a floor against falling MM rates and also provide some flexibility. Ergo - in a given year if my holding is fairly valued, I'll sell some and roll the CD. OTOH if my holding is undervalued, I'll cash in a maturing CD rather than roll it. Again and again if necessary for 5 years. Sounds simple enough, but I KNOW (KNOW!)it's not.

Markets can change, and fast. Stock market AND bond markets. I'm satisfied to have locked in the CDs. Waiting on a rollover to fund the last CD.

Thank you again for this board. It is a terrific resource.

Lethean
Print the post Back To Top
No. of Recommendations: 0
and he suggested calling on Tuesday mornings

Isn't the Fed supposed to drop the rate .25 on Tuesday? ;-)
Print the post Back To Top
No. of Recommendations: 0
Not a "slame dunk" [pardon the expression] I'm not quite on-board that particular train.

and he suggested calling on Tuesday mornings

Isn't the Fed supposed to drop the rate .25 on Tuesday? ;-)


And a 25bpt move would likely? trah equities anyway. IMV, the marks are looking for a 50bpt move - anything less - will disapoint and I don't think we're there yet. US$ vs EU$ is more worrisome to Helo-Ben IMV, and presently, rightly so. If? EU interest rates exceed the US interest rates in adjusted real terms I think we'll see massive outflows towards the stronger currency.

KBM ("gaming the system")
PS: I could be very long & wrong - tm
Print the post Back To Top
No. of Recommendations: 1
US$ vs EU$ is more worrisome to Helo-Ben IMV, and presently, rightly so. If? EU interest rates exceed the US interest rates in adjusted real terms I think we'll see massive outflows towards the stronger currency.

I'm looking at wheat. Gas I can live without, but bread and pasta, not to mention wine? (My wife would insist I add the thou, but not sure she is going up at a rate faster than CPI-U).

http://news.bbc.co.uk/2/hi/europe/6992444.stm
Print the post Back To Top
No. of Recommendations: 0
Not a "slame dunk"

I notice that bot only are stocks not crashing, at least for now, but yields are up by quite a bit today and the inflation differential is going back up.

Perhaps the day traders are trying to beat each other to the Fed not going down 50 basis points rush. (I'd love to see Bernanke stay pat and send some panic into the players, but then gain I like anything that gives Wall Street ulcers, since tar and feathers is too old-fashioned).
Print the post Back To Top
No. of Recommendations: 0
How bout a good old fashioned "lynching" - I'll bring the rope you bring the tree

(I like anything that gives Wall Street ulcers, since tar and feathers is too old-fashioned)


Nothing is to good for my "street freinds" - the "risk arbitragers"
Print the post Back To Top
No. of Recommendations: 0
I have a CD ladder at my credit union. I also have IRA and after tax mutual fund accounts at Vanguard large enough to qualify for Voyager status. So I was quite interested when you pointed out that CD's were available thru Vanguard. Possiblt an opportunity to consolidate and simplify my investments.

BUT, rates aside, Vanguard commissions on CDs seem excessive to the point of prohibitive.

Purchase commission, If below 50K is $5 per thousand, with $50 minimumf

$50K and above is $3 per thousand, with $500 maximum.

At best, on a one year, you are giving up 30 basis points just to buy the darn thing.

Am I missing something?
Print the post Back To Top
No. of Recommendations: 2
mike

I bought new issue CDs from Vanguard. I was told by the rep that there was zero commission for both on-line and by phone transactions.

These new issue CDs once bought then trade on the secondary market, and the principle amount will fluctuate. However, if held to maturity they will pay at par. I believe it is these secondary market CDs that incur commissions.

Lethean
Print the post Back To Top