Originally Posted by moguls
Long term CD matured. Getting ready to re-invest. I'm considering VAIPX. Is anyone out there buying TIPS right now? They've had a big run up. Not sure if buying now is wise. Any thoughts?
First, before you consider TIPS, get a good book like the one written by financebuff, and be sure you really understand how they work and how they are priced.
Next, don't buy TIPS until your chances of gaining are at least as large as your chances of losing capital prior to maturity. With some shorter duration TIPS, at their present prices you lock in a real loss to maturity the day you buy. For example, 10 year and shorter TIPS have a negative real yield. Even 30 years out your real yield will be < 1%.