September 2018 CPI-U numbers released: Neutral on November 2018 I Bonds

The U.S. Bureau of Labor Statistics released the September 2018 Consumer Price Index (CPI-U) inflation data last week, which increased by 0.12% over the past 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 2018 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 2018 (249.554) and September 2018 (252.439) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2018 issue I Bonds.

That means these bonds would earn the current rate of 2.52% (using 0.3% fixed & 1.11% variable) for the first 6 months and 2.62% (combined 0.3% fixed & 1.16% variable) for the second 6 months. IMO, the current 2.52% rate doesn't really make an October purchase terribly appealing unless you believe that the 0.3% fixed portion will go down next month. At this point, I believe an I Bond purchase is a basically a wash when compared to something like the 1 year CD @ 2.65% APY currently being offered at Live Oak Bank.

Having already maxed out my 2018 purchase limit in January (as I did in 2017), I can't act on these anyway. As always, I will continue to evaluate them and see what makes sense for me in 2019.

October 2018 Financial Asset Roundup

Here are my current financial assets as of the market close on October 10th, 2018:

Asset	Sep 2018	Oct 2018	Change
Checking	1,198	275	-923
Money Market	66,893	48,484	-18,409
Savings Bonds	155,168	155,493	325
Treasury Bills	5,000	6,000	1,000
CDs	29,695	39,806	10,111
Brokerage	163,709	159,074	-4,635
401k	170,782	167,894	-2,888
Roth IRA	155,158	150,469	-4,689
SEP IRA	789,634	756,094	-33,540
529 Savings	176,470	174,454	-2,016
Total Assets	$1,713,707	$1,658,043	-$55,664
			-3.25%

The market had remained relatively flat since the last update until recent interest rate worries, with the S&P 500 falling 3.18% during that time:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for September fell to 3.7%, the lowest since December 1969. Oil prices have climbed a bit to the $72 level (up from $67). And for the second month in a row, we have a hurricane (Hurricane Michael) hitting the continental US. Once again, my best to everyone impacted by this huge storm.

On the financial front, I continued to flirt with 28 day T-Bills by putting some money into bills with an investment rate of 2.138%. To mix thing up a bit, I also put some cash into a Alliant 2.65% APY 12 month CD (my first non-Penfed CD in years). I'm also about due for another equity distribution from my S Corp, which I might use to dabble in T-Bills a bit more.

As for the non-financial, the weather has been cooling off and everyone is busy with work and school. Oh, and my lawn is looking good as my hard work has paid off. :)