Picking up Nickels

Tuesday, April 19, 2022

March CPI-U numbers released: Buy April 2022 issue I Bonds Now!

The U.S. Bureau of Labor Statistics released the March 2022 Consumer Price Index (CPI-U) inflation data last Tuesday, which rose by 1.34% last month, a historically large increase.

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 2022 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 2021 (274.310) and March 2022 (287.504) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2022 issue I Bonds.

That means these bonds would earn a composite rate of 7.12% (using 0% fixed & 3.56% variable) for the first 6 months and 9.62% (using 0% fixed & 4.81% variable) for the second 6 months. Based on this inflation spike, April 2022 issue I Bonds are a screaming hot buy when compared to something like the 12 month CD @ 1.31% APY currently being offered by Luana Savings Bank.

So, should you wait until May to get that 9.62 rate?. No, a thousand times no! If you buy I Bonds before May you will get a guaranteed 7.12% return for six months followed by 9.62% for the six months after that. If you like money, my advice is to back up the truck and buy now!

Tuesday, April 12, 2022

April 2022 Financial Asset Roundup

Here are my current financial assets as of the market close on April 11th, 2022:

Asset Mar 2022 Apr 2022 Change

Checking 2,455 3,479 1,024
Money Market 121,912 124,878 2,966
Savings Bonds 205,736 206,628 892
Treasury Bills 0 0 0
CDs 42,456 42,560 104
Brokerage 261,745 271,210 9,465
401k 395,030 411,228 16,198
Roth IRA 239,723 245,031 5,308
SEP IRA 1,109,543 1,110,568 1,025
529 Savings 171,546 168,949 -2,597
Total Assets $2,550,146 $2,584,531 $34,385

The S&P 500 has bounced back a bit, rising 3.59% (-7.42% YTD) since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for March fell to a new pandemic low of 3.6%, with 431,000 new jobs added. The Federal Reserve announced the first rate hike since 2018, with more to follow in the coming months. Oil prices pulled back to the $98 level (from $107), which translates to a local regular unleaded gasoline price of $3.91 at my last fill-up.

On the financial front, I did the usual 401k transactions and a Vanguard VTI brokerage purchase. I've also been keeping an eye on Penfed's CD rates, which have been showing signs of life lately with the increase in inflation/interest rates. Today is also the day that the March 2022 CPI-U numbers come out, so I'll have to follow up with the impact on Series I savings bonds as well.

As for the non-financial, I'm still waiting on my CPA to make the final updates to my 2021 personal tax returns as the filing deadline approaches. It's always a good feeling when I can put that behind me and focus on the current year. :)