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You Need to Know Why I Love Vanguard GNMA

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Good morning from Newport, RI where at 5:22 am it’s 11 degrees outside, 1-3 inches of snow are expected, and with the wind it feels like -5. In Bartlett, NH my iPhone says it’s -6 outside with the wind blowing 29 mph making it feel like it’s -34. It’s cold outside. But just like any other day, here I am writing to you. And that’s how I want you to think about your portfolio and one position in particular.

If you own Vanguard GNMA you might be wondering if the winter vortex is upon you. You may be wondering if this is a time to sell, or, maybe this is a buying opportunity. I don’t want you to worry about either this morning. The word “opportunity” isn’t exactly the word I’d use to describe any investing in Vanguard GNMA. That’s why I love the position.

I view my Vanguard GNMA as a lifetime/legacy holding. I will never sell it and I will add to it when I have some cash to invest. I don’t worry about price. I’m in it for the income. That’s how you need to think about it. It’s a place/home that puts your lazy money to work.

Imagine how you felt about your house during the polar vortex that was the housing crash. Chances are you didn’t sell and if you had a mortgage you made the payments. That’s how I want you to think about Vanguard GNMA. Imagine there are no buyers because you’re not selling.

If Vanguard GNMA wasn’t liquid, and was like a house, you might be tempted to sell it but you wouldn’t be able to. Believe me, there’s a trader sitting at his computer right now hoping and waiting to separate you from your position. Don’t do it. Investing isn’t supposed to be easy. Sometimes it’s cold.

When thinking about your GNMA remember the words of legendary Vanguard founder Jack Bogle, “Don’t just do something, stand there!” and you’ll do the right thing with your GNMA for the rest of your life.

 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.