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Thursday, October 30, 2008

Purchases TIPS for Free

Last week, I purchased $5K of TIPS during the treasury auction using my account at Fidelity account. Now that the auction is concluded, I actually bought $5K in bonds for a total of $4,620.44. I seem to have made $1.42 in accrued interest. I did not pay any commission.

This was my first attempt at purchasing individual bonds. I don't like bond funds (especially government ones) because the fund value can drop as interest rates change. With the individual bond, they interim value might vary from day to day; however, I will get the full face value (plus an inflation kicker) back when the bond matures.

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