Picking up Nickels

Wednesday, April 19, 2017

March CPI-U numbers released: April 2017 issue I Bonds are a buy

The U.S. Bureau of Labor Statistics released the March 2017 Consumer Price Index (CPI-U) inflation data last week, which increased by 0.08% last month.

As always, now (along with the release of the September CPI-U) 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 April 2017 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 September 2016 (241.428) and March 2017 (243.801) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2017 issue I Bonds.

That means these bonds would earn a composite rate of 2.76% (using 0% fixed & 1.38 variable) for the first 6 months and 1.96% (using 0% fixed & 0.98% variable) for the second 6 months. Based on this, April 2017 issue I Bonds are a strong buy when compared to something like the 12 month CD @ 1.50% APY currently being offered by Connexus Credit Union.

I already maxed out my 2017 annual I Bond allotment in January and have already received the bulk of my April 2017 issue paper I Bonds from my Federal tax refund, so I'm pretty much all in at this point. :)

Tuesday, April 11, 2017

April 2017 Financial Asset Roundup

Here are my current financial assets as of the market close on April 10th, 2017:

Asset Mar
Checking 1,788 1,705 -83
Money Market 66,397 61,079 -5,318
Savings Bonds 130,175 130,331 156
Treasury Bills 0 0 0
CDs 40,103 40,216 113
Brokerage 137,322 139,653 2,331
401k 139,556 142,141 2,585
Roth IRA 121,541 127,500 5,959
SEP IRA 620,304 620,363 59
529 Savings 151,176 153,421 2,245

Total Assets $1,408,362 $1,416,409 $8,047

The S&P 500 has pulled back a bit since the last update, falling 0.65% during that time:

(chart courtesy of google.com)

On the jobs front, the unemployment rate for March fell to 4.5%, the lowest it has been since the 4.4% number in May 2007. Oil prices have picked up to the $53 level, apparently with a little help from the US missile launch in Syria last week.

On the financial front, my asset levels have reached an all-time high for the fourth fifth month in a row, breaking the previous high from March 2017. My 2016 personal tax returns and Roth IRA contribution are complete and the bulk of my Federal income tax refund will be in the form of paper Series I savings bonds. I'll likely make an initial 2017 SEP IRA contribution before the next update and am considering taking a distribution from my S Corp now that the dust has finally settled on 2016.

As for the non-financial, I'm very pleased to have extended my contract with my largest client! I'm looking forward to having another successful year with such a great customer. :)