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Re: Malkiel Defends Efficient Market Theory
Old 12-27-2004, 10:51 PM   #41
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Re: Malkiel Defends Efficient Market Theory

The current yield for a 10-year TIPS is about 1.7%. The YTM for your CDIPS with the parameters you gave is about 2.2%. So, you're talking about a difference of 50 basis points. Not bad, but not outrageous. I haven't run into one myself. Does Vanguard tack on fees or a spread?
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Re: Malkiel Defends Efficient Market Theory
Old 12-28-2004, 07:40 AM   #42
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Re: Malkiel Defends Efficient Market Theory

Bob and Wab, thanks for your responses. Wab,
since the CDIPS mature in Nov 2013, they are
closer to 7 year TIPS at 1.3% than 10 year. I
have no idea what VG charges or if there is a
spread. Maybe Bob can answer that.

Cheers,

Charlie
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Re: Malkiel Defends Efficient Market Theory
Old 12-28-2004, 12:43 PM   #43
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Re: Malkiel Defends Efficient Market Theory

Charlie, at Vanguard you can buy TIPS that mature on 1/15/2014, which is pretty close to the 11/2013 maturity date you mentioned. The YTM is 1.578% - their current offer yield. Their bid yield at the moment is 1.592%.

They charge an annual maintenance fee of $15 per brokerage account for Voyager clients (free for Flagship clients and $30 for others). There is an online *transaction fee of $0.75 per $1,000 face amount, but there is a 40 minimum fee and a $75 maximum fee.
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Re: Malkiel Defends Efficient Market Theory
Old 12-28-2004, 01:00 PM   #44
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Re: Malkiel Defends Efficient Market Theory

Quote:
Charlie, at Vanguard you can buy TIPS that mature on 1/15/20014, which is pretty close to the 11/2013 maturity date you mentioned.
18000 years? You have a much longer time horizon than I do!
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Re: Malkiel Defends Efficient Market Theory
Old 12-28-2004, 03:16 PM   #45
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Re: Malkiel Defends Efficient Market Theory

Yep, that should be 2014, not 20014. I changed it.
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