September 2016 CPI-U numbers released: November 2016 I Bonds are a buy!

The U.S. Bureau of Labor Statistics released the September 2016 Consumer Price Index (CPI-U) inflation data this morning, which increased by 0.24% last month.

As always, now is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for October 2016 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from March 2016 (238.132) and September 2016 (241.428) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2016 issue I Bonds.

That means these bonds would earn the current anemic rate of 0.26% (using 0.10% fixed & 0.08% variable) for the first 6 months and 2.86% (combined 0.10% fixed & 1.38% variable) for the second 6 months. It goes without saying that it makes sense to wait until November to make the purchase to avoid six months of 0.26% interest. Even though we only know the interest rate for the first six months of November 2016 Series I savings bonds, a minimum composite rate of 2.76% (assuming a 0% fixed portion) is market beating when compared to short term investments like the 1 year CD @ 1.30% APY currently being offered at Everbank.

I will personally be buying the maximum amount from treasurydirect.gov in November since I haven't made any online I Bond purchases so far 2016. In fact, a 2.76% rate is so attractive in this environment that I will probably purchase even more in January 2017.

October 2016 Financial Asset Roundup

Here are my current financial assets as of the market close on October 11th, 2016:

Asset	Sep 2016	Oct 2016	Change
Checking	1,123	1,244	121
Money Market	82,348	82,260	-88
Savings Bonds	109,538	109,663	125
Treasury Bills	0	0	0
CDs	39,447	39,555	108
Brokerage	128,940	123,083	-5,857
401k	133,788	131,906	-1,882
Roth IRA	112,682	111,871	-811
SEP IRA	564,930	560,487	-4,443
529 Savings	142,986	143,297	311
Total Assets	$1,315,782	$1,303,366	-$12,416
			-0.94%

The S&P 500 continued to fall since the last update, dropping 1.03% during that time:

(chart courtesy of yahoo.com)

On the jobs front, the unemployment rate for September rose slightly to 5.0% with 156,000 new jobs were created. Oil prices have continued to rise to the $51 level as OPEC has agreed to production cuts.

On the financial front, it is almost time to decide on a Series I savings bond purchase. The September CPI-U inflation numbers are due out next week, and the data should validate the position that waiting until November to make the purchase is the way to go.

On the non-financial front, thankfully there isn't much to report. The weather is changing (A/C is off, heat is on) and I have been taking advantage of the cool Fall weather to try to get my lawn whipped into shape for next year. Winter is coming!