Why specifically "new issue"? Is there something more advantageous to that than a reopened issue?
My ladder uses 5 year TIPS. Currently every rung of that ladder was originally issued on April 15th and matures on April 15th five years later. While there is no guarantee that Treasury will maintain that pattern, for as long as I have been maintaining my ladder a rung has matured in April and the treasury has offered a new 5 year TIPS in April. Thus I normally maintain my ladder by purchasing a "new issue" at auction the same month as my oldest bond matures.
I did replace one rung once using a reopened issue. TIPS yields had I thought temporarily dipped to absurd lows so I skipped the "new issue" and purchased the same bond at the reopened auction later in the year. Treasury usually reopens the 5 year TIPS a few times during the year, so if you miss the first auction you will have additional chances to buy the same bond at auction.
Also, would you, or anyone else, be so kind as to expand a little on purchasing in the secondary market (pros/cons)? I assume one needs a broker. Vanguard states that it only submits non-competitive bids, so I assume also that they are not purchasing on the secondary market. What type of broker is needed to submit a bid on the secondary market?
I think you have misunderstood some terminology, and thus have misunderstood Vanguard's policy. When the treasury has an auction for a new or reopened bond (see
Announcements, Data & Results) the treasury accepts two kinds of bids non-competitive bids and competitive bids. At this year's 5 year TIPS auction the largest permitted non-competitive bid was $5,000,000.00 while the largest permitted competitive bid at a single yield was $6,300,000,000.00. Until you want to place a bid larger than the maximum non-competitive bid, I believe you will always want to use a non-competitive bid. So Vanguard's restriction should not bother you. If you need to bid more than five million at a single Treasury auction, you need professional advice, not my amateur understanding of the situation.
Using 5 year TIPS as an example, in recent years the Treasury has auctioned a new 5 year TIPS every April, and has reopened the 5 year TIPS auction selling additional bonds two or more times (I don't pay much attention) during the year. However, the secondary market is not run by the Treasury. It lets people who already own bonds sell those bonds to other people who don't want to wait for the next Treasury auction. The catch is there is normally a bid-ask spread, and/or an explicit or hidden commission involved in buying on the secondary market. Those fees are usually not huge for Treasuries, and I have sold Treasuries on the secondary market. However, I prefer to buy my Treasuries at wholesale during Treasury auctions where possible, and to hold them to maturity.
So what Vanguard is saying is they only accept non-competitive bids for official Treasury auctions. However, during business hours the Vanguard "bond desk" stands ready to buy and sell Treasuries, Agencies, Municipal, and Corporate bonds, as well as brokered CDs on the secondary market. Under the "Buy & Sell" tab click the "
View and trade bonds or CDs" link.
Personally, when my portfolio was smaller, I used Treasury Direct to purchase my Treasury securities. Now I find it more convenient to use Vanguard where most of my other investments are located. I don't recall ever purchasing a bond on the secondary market. Though I have sold Treasuries on the secondary market, my equivalent of cashing out a CD early.