vnatale wrote: ↑Wed Dec 04, 2019 7:18 pm
I started this topic on July 4th and it is STILL going strong!
Tonight I came back to it to reread what I initially wrote plus what everyone else subsequently wrote. Tonight I also completed reading Craig and Tex's book for the third time this year. The goal is to FINALLY come up with the plan I will execute to then be completely in the Permanent Portfolio. I still want to eventually get to Level 4 (per the book) but I do want to finally get the Permanent Portfolio started. I also recognize that I can gradually move each of the four investment components up levels from where I will be originally starting them so that each does end up at Level 4.
Therefore, along with that, I am going to first start off my cash investment 100% in Vanguard Treasury Money Market Fund (VUSXX). I at first panicked because it was NOT listed under Money market funds in Vanguard's Mutual Fund list. Had it somehow closed??!! But then I found it doing a search on its Ticker.
It currently has a Expense ratio of 0.09%. Quite low. With a 7 day SEC yield of 1.65% it's really earning 1.74%.
Assuming I later buy Treasury Bills in its place I could get quite close to the 1.74% rate, either slightly higher or slightly lower?
And, the time break-even is taking that 0.09% Expense ratio which turns into $9 per year for every $10,000 invested / $90 per year for every $100,000 invested and comparing that total Expense ratio $ amount I'd be avoiding by doing it myself to how much time a year it'd cost for me to do it myself (i.e., buying the Treasury Bills directly).
It seems that compared to the last time I looked the Portfolio composition has deteriorated with only 90.8% being in U.S. Treasury Bills with the remaining 9.2% being in U.S. Govt. Obligations? Seemed last time I looked the ratio was closer to 99% / 1%? Or, maybe I am mis-remembering? But this is a qualitative difference that pushes me more to doing it myself.
I have questions regarding buying the Treasury Bills at Vanguard brokerage but I'll save that for the next Reply.
Vinny
Looks like I had NOT mis-remembered. Going back to what I originally wrote on July 4, 2019:
"Going to Vanguard I can see that the current composition of the Vanguard Treasury Money Market Fund (VUSXX) is:
U.S. Treasury Bills 100%"
At Vanguard I see this regarding the fund:
"Vanguard Treasury Money Market Fund seeks to provide current income, while maintaining a stable $1 NAV and a very short average maturity. The fund invests 100% of its assets in securities backed by the full faith and credit of the U.S. government. The portfolio managers seek to add value primarily by emphasizing specific issues that appear attractively priced based on historical yield-spread relationships. The average maturity typically ranges from 30–60 days, and the fund maintains a dollar-weighted average maturity of 60 days or less, and a dollar-weighted average life of 120 days or less."
I guess the difference from today and July 4, 2019 is that as of today they sought "to add value primarily by emphasizing specific issues that appear attractively priced based on historical yield-spread relationships"?
I am going to attempt to query the current Portfolio manager regarding this. Anyone ever had any communications with a Vanguard Portfolio manager?
Vinny