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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