Advertisement
Politics

Are Dick Cheney's Money Managers Betting on Bad News?

A look at the President and Vice President's financial disclosure forms.

Vice President Cheney's financial advisers are apparently betting on a rise in inflation and interest rates and on a decline in the value of the dollar against foreign currencies. That's the conclusion we draw after scouring the financial disclosure form released by Cheney this week.

As of the end of last year, Cheney and his wife, Lynne, held between $10 million and $25 million in Vanguard Short-Term Tax-Exempt fund (it's impossible to be more precise because the disclosure form lists holdings within ranges). The fund's holdings of tax-free municipal bonds mature, on average, in a little more than a year -- meaning that the fund should hold up well if rates rise. The Cheneys held another $1 million to $5 million in Vanguard Tax-Exempt Money Market fund, which is practically risk-free and could benefit from continued increases in short-term interest rates. And the couple had between $2 million and $10 million in Vanguard Inflation-Protected Securities fund. The principal and interest payments of inflation-protected bonds rise along with consumer prices, making them good inflation hedges.

Advertisement - Article continues below

The Cheneys also had between $10 million and $25 million in American Century International Bond. The fund buys mainly high-quality foreign bonds (predominantly in Europe) and rarely hedges against possible increases in the value of the dollar. Indeed, its prospectus limits dollar exposure to 25% of assets and the fund currently has only 6% of assets in dollars, according to an American Century spokesman.

Advertisement
Advertisement - Article continues below

The Cheneys' total assets could be as high as $94.6 million, according to the disclosure form. The vice-president's advisers say the vice president pays no attention to his investments. His lawyer, Terrence O'Donnell, says outside money managers supervise the investments. "He has nothing to do with it," O'Donnell says.

As for stocks, the couple held between $1 million and $5 million in Lazard International Equity and a like amount in Lazard Emerging Markets funds. The Cheneys' relatively few U.S. stock fund holdings include $1 million to $5 million in GMO Tax-Managed U.S. Equities III.

Advertisement - Article continues below

President Bush may be bold in his public policies, but his private investments appear decidedly on the meek side. Bush and his wife, Laura, reported on their disclosure form that they held combined assets of $7.2 million to $20.9 million.

As of the end of last year, the Bushes' two largest assets were their Texas ranch, valued at between $1 million and $5 million, and a blind trust, also valued at between $1 million and $5 million. Of course, it's impossible to tell how the trust is invested, so it could be heavily in stocks. The White House would not make the trust's managers available for comment.

Beyond the trust, the First Family's investable assets are largely in super-safe Treasury notes, money-market funds and bank certificates of deposit. The Bushes' holdings in these instruments totaled between $1.7 million and $4.4 million. The President also listed a Health Savings Account worth between $1,000 and $15,000.

The Bushes confine most of their stock investing to their relatively small IRAs and to the President's retirement account from when he was governor of Texas. As of last December, that account was worth $108,016 and was invested entirely in Vanguard Wellington, which owns stocks and bonds. The President's IRA, worth $87,074, includes $30,142 in Capital Income Builder, a balanced fund that's part of the American funds family; $30,866 in Growth Fund of America, another American fund; and $24,219 in zero-coupon U.S. Treasury bonds. Nearly all of the First Lady's IRA, worth $8,556, was also in Capital Income Builder.

Advertisement
Advertisement

Most Popular

7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020
Turning 60 in 2020? Expect Lower Social Security Benefits
Coronavirus and Your Money

Turning 60 in 2020? Expect Lower Social Security Benefits

When you file for Social Security, the amount you receive may be lower.
July 30, 2020
Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy
mortgages

Retired? Good Luck Getting a Mortgage, Even If You’re Wealthy

One 70-year-old’s story highlights the challenges. Prepare for more paperwork and hoops to jump through than you could imagine.
August 2, 2020

Recommended

The Best and Worst Presidents (According to the Stock Market)
Markets

The Best and Worst Presidents (According to the Stock Market)

Mount Rushmore features massive 60-foot-tall busts of celebrated presidents George Washington, Thomas Jefferson, Abraham Lincoln and Theodore Roosevel…
August 4, 2020
Stock Market Winners, Losers and Lessons Learned
investing

Stock Market Winners, Losers and Lessons Learned

Kiplinger.com senior investing editor Kyle Woodley joins our Your Money's Worth podcast to discuss what we can learn about investing from the stock ma…
August 4, 2020
Stock Market Today 7/31/20: Big Tech Roars, Everyone Else Snores
Markets

Stock Market Today 7/31/20: Big Tech Roars, Everyone Else Snores

Blowout earnings from Apple (AAPL), Amazon.com (AMZN) and Facebook (FB) led another charge by the Nasdaq on Friday.
July 31, 2020
Stock Market Today 7/30/20: Stocks Grind Through a Deluge of News
Markets

Stock Market Today 7/30/20: Stocks Grind Through a Deluge of News

The U.S. suffers its worst GDP drop in history, jobless claims rise and a host of other headlines converged to send the market to mixed results Thursd…
July 30, 2020