Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
TIPS - Anyone else considering dumping these
Old 06-05-2012, 05:31 PM   #1
Recycles dryer sheets
 
Join Date: May 2010
Posts: 95
TIPS - Anyone else considering dumping these

as they currently have a negative yield?

I'm thinking of dumping my TIPS in my 401K and switching to stocks. Thoughts?
__________________

__________________
Hiredgun is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-05-2012, 06:01 PM   #2
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
I dumped mine (too early) a few years ago. I can't see investing in any fixed income vehicle that guarantees a negative real return if held until maturity.
__________________

__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 06-05-2012, 07:13 PM   #3
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
I loaded up on TIPS (individual bonds, not a fund) in November 2008 when they were priced for apocalypse. At the time I staggered maturities between 2016 and 2032, priced with "real" yields close to 3%. I sold about half of them last year. I still keep a portion as a part of the defensive "inflation protection" allocation. But I wouldn't buy them at these prices, which I know some would say that means I should sell them all.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is online now   Reply With Quote
Old 06-05-2012, 07:16 PM   #4
Recycles dryer sheets
beowulf's Avatar
 
Join Date: Oct 2007
Posts: 466
The Vanguard TIPS fund seems to be doing well for me.
__________________
Mission accomplished - not necessarily ER, but certainly R.
beowulf is offline   Reply With Quote
Old 06-05-2012, 07:40 PM   #5
Recycles dryer sheets
 
Join Date: Dec 2011
Posts: 77
Yes, dumped mine recently. The two key critiques I have read that were meaningful in making my decision:

>They are like an arsonist selling fire insurance
>They are such recent recent investment vehicles that their performance is untried in all economic situations (inflation, deflation, recession, prosperity)

Asset allocation is the tricky part of investing IMHO...
__________________
web_diva is offline   Reply With Quote
Old 06-05-2012, 08:54 PM   #6
Full time employment: Posting here.
misanman's Avatar
 
Join Date: Apr 2008
Posts: 535
Dumped mine a while back too. They worked for awhile but not so much any more.
__________________
"The best thing about the future is that it happens one day at a time." -- A. Lincoln
misanman is online now   Reply With Quote
Old 06-06-2012, 05:23 AM   #7
Recycles dryer sheets
 
Join Date: Nov 2008
Posts: 98
Well, if you believe my Quicken report, my Vanguard TIPS fund is up 12% in the past year. A little over 5% year to date.
__________________
Masquernom is offline   Reply With Quote
Old 06-06-2012, 07:43 AM   #8
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,220
Quote:
Originally Posted by Hiredgun View Post
as they currently have a negative yield?

I'm thinking of dumping my TIPS in my 401K and switching to stocks. Thoughts?
I just bought some in early April, I consider them a shorter term investment, if I was going to invest long term (>10 yrs) I would buy stocks/reits, for anything shorter then I use balance funds or bond funds.
I try not to guess.
TJ
__________________
teejayevans is offline   Reply With Quote
Old 06-06-2012, 07:50 AM   #9
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
I sold mine a couple of years ago when real yields effectively collapsed to around 1% or so. I made a significant capital gain in my IRA on the trade. If someone feels like getting the "true" story, they can search my old posts. I know I made a comment somewhere on the forum when I did it. As it turned out, I sold out way too soon. I sold when I felt the real yields were absudly low. Now they are totally beyond absurd.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 06-06-2012, 08:08 AM   #10
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Dumped my tips etf back in March.
__________________
DFW_M5 is online now   Reply With Quote
Old 06-06-2012, 11:16 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,971
Dumped what little I had last summer, most of my fixed income allocation was in a TBM equivalent. However, I did not change my AA (the OP appears to be asking a different question), just don't hold TIPS at present. I'm certainly not fundamentally against TIPS, I may devote some fixed income money to a TIPS fund again one day.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 06-06-2012, 11:21 AM   #12
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,852
Well, you all are making me feel better about not having any TIPS. For the past few years I had been waiting for a good time to jump in, because I am a worrier and inflation worries me. But I never did, and do not own any.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 06-06-2012, 11:24 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
This thread reminded me to get rid of the TIPS that I still owned. Done!

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 06-06-2012, 02:11 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,816
As always, the question is "Where do you take the money?"

The OP option is stock, which changes the AA. Is anyone selling TIPS and buying some other fixed income asset?
__________________
Independent is offline   Reply With Quote
Old 06-06-2012, 03:36 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,971
Quote:
Originally Posted by Independent View Post
As always, the question is "Where do you take the money?"

The OP option is stock, which changes the AA. Is anyone selling TIPS and buying some other fixed income asset?
For better or for worse, I did. Changing asset allocation only because of what the tea leaves may or may not seem to say isn't consistent with investing as I know it. YMMV
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 06-06-2012, 04:45 PM   #16
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Midpack View Post
For better or for worse, I did. Changing asset allocation only because of what the tea leaves may or may not seem to say isn't consistent with investing as I know it. YMMV
The key word being "only". I did ratchet back from a 70/30 target to 60/40 after the 2008-09 meltdown -- though I waited until late 2010 and into 2011 to do most of the rebalancing to the lower equity stake. Living through that crash suggested to me that 70/30 was a little too "rich" for my blood in the long term. I've found that it's a lot easier to "set and forget" 60/40 than it was with 70/30.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is online now   Reply With Quote
Old 06-06-2012, 04:55 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,971
Quote:
Originally Posted by Midpack View Post
Changing asset allocation only because of what the tea leaves may or may not seem to say isn't consistent with investing as I know it. YMMV
Quote:
Originally Posted by ziggy29 View Post
The key word being "only".
Yep, the underline was definitely intentional...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 06-06-2012, 06:06 PM   #18
Recycles dryer sheets
 
Join Date: Dec 2011
Posts: 77
Quote:
Originally Posted by Independent View Post
As always, the question is "Where do you take the money?"

The OP option is stock, which changes the AA. Is anyone selling TIPS and buying some other fixed income asset?
Going into Harry Browne's Permanent Portfolio. Info and Asset Allocation is shown here:

http://crawlingroad.com/blog/harry-b...olio-archives/
__________________
web_diva is offline   Reply With Quote
Old 06-06-2012, 07:35 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
My 3% TIPS will mature this summer. I also have a 4% T-Note maturing. I'll probably re-balance into small caps.
__________________
eridanus is offline   Reply With Quote
Old 06-06-2012, 10:19 PM   #20
Thinks s/he gets paid by the post
veremchuka's Avatar
 
Join Date: Oct 2010
Location: irradiated - too close to the nuclear furnace
Posts: 1,294
I think buying the Vanguard fund would be like buying most any bond fund, the nav is just way too expensive. I wouldn't buy from Treasury Direct because I'm not sure how to in my roll over IRA or Roth. I've read about TIPS many times and kind of get it but I really don't understand them clearly, I need to talk to someone that can explain as I ask questions. As they say never buy any investment that you do not understand. The trick was to buy the fund years ago and you'd have all the capital appreciation.
__________________

__________________
veremchuka is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:02 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.