Added Short Term Bond ETF

I still have $11,100 sitting in my TD Ameritrade account and decided to use it for some static holdings in bonds instead of trading options there with the higher fees than my new Interactive Brokers account.  I think long term bonds are due for a move lower as interest rates are almost guaranteed to go up in 2010.  With that in mind I kept my choices limited to short term bond ETFs, even with the low yields.  I don’t think I have enough allocated towards bonds to start picking individual bonds for this account yet.  I considered going back to PVI which is pretty safe, but has such a small yield now it almost wasn’t worth the effort.  That took me through the TD Ameritrade bond ETF screener and I came up with SPDR Barclays Capital Short Term Municipal Bond (SHM).  SHM has a tax free annual yield of 1.84%.  It moves up and down more than PVI, but not so fast or far that I think my risk is too great.  After bond prices drop some, I plan to move this and or future funds to higher yielding debt.

I almost didn’t notice this order hit.  I entered this order on Wednesday, after the market closed and it hit in the last minute of the shortened trading day on Thursday before Christmas while I was busy getting ready for the next few days of visiting family.  I bought 460 shares of SHM at 24.06 and paid 11,077.59 with commissions.  I’ll add more cash to this account in 2010 and increase my bond allocation, but plan to add a little more to my IB account before that and continue to stay focus on growth for the vast majority of my account.