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Can I use EDV instead of TLT? Converting to HBPP Part I
Posted: Tue Aug 23, 2011 2:27 pm
by neil
I used to be a boglehead
Now I am converting my asset to HBPP, slooowly.
Can I use EDV instead of TLT? My Roth account is with Vanguard so buying/selling vanguard ETF is free.
Re: Can I use EDV instead of TLT? Converting to HBPP Part I
Posted: Tue Aug 23, 2011 3:49 pm
by doodle
I have owned EDV before...two drawbacks.
#1 - It is illiquid with high bid/ask spreads
#2 - It is very volatile....maybe 1.5x that of TLT.
I mixed EDV with TLT and FLBIX in another account.
I then subsequently sold off all my 30 year bonds and went to a 5 year treasury ladder. I am waiting for this idea to be vindicated.
Re: Can I use EDV instead of TLT? Converting to HBPP Part I
Posted: Tue Aug 23, 2011 4:28 pm
by AdamA
neil wrote:
Can I use EDV instead of TLT?
The answer is
maybe.
In general, zeros are not a suitable replacement for 30 year bonds, for the reasons listed by Doodle (above).
There are some special circumstances where they
may be used and you
may fall into one of these categories, becuase you would be buying EDV in a tax advantaged account. See the link below.
http://gyroscopicinvesting.com/forum/ht ... p=792#p792
Re: Can I use EDV instead of TLT? Converting to HBPP Part I
Posted: Tue Aug 23, 2011 4:34 pm
by MediumTex
Starting off, I would just use TLT. It works fine.
As far as free trades for EDV, that's not a big benefit if you are only buying and selling once every few years.