TIPS - Anyone else considering dumping these
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FIRE'd@51
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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.
ziggy29
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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.
beowulf
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The Vanguard TIPS fund seems to be doing well for me.
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...
>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...
misanman
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Dumped mine a while back too. They worked for awhile but not so much any more.
Masquernom
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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.
teejayevans
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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
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.
Midpack
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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.
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W2R
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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.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This thread reminded me to get rid of the TIPS that I still owned. Done!
Ha
Ha
Independent
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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?
The OP option is stock, which changes the AA. Is anyone selling TIPS and buying some other fixed income asset?
Midpack
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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
ziggy29
Moderator Emeritus
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.
Midpack
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yep, the underline was definitely intentional...
Going into Harry Browne's Permanent Portfolio. Info and Asset Allocation is shown here:
http://crawlingroad.com/blog/harry-browne-permanent-portfolio-archives/
veremchuka
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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.
Spanky
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We still hold on to our Vanguard TIPS fund.
Spanky
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Why stocks? Would that change your allocation mix?
nun
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A TIPS fund has been part of my allocation for a long time. The current rates are terrible, but they just keep going up in price......nice returns so far this year, can't say that for my equity index funds after the last month. Given the state of the world I don't see a reason to sell TIPS as I think people will keep pouring more money into them as a safe harbor.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I don't see why you need a destination for funds taken out of TIPS. Cash at 0% is better than TIPS at -x%.
As to the possibility of continuing capital growth, perhaps, but where might it end?
Overall, good decisions are rewarded over time.
Ha
As to the possibility of continuing capital growth, perhaps, but where might it end?
Overall, good decisions are rewarded over time.
Ha
nun
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I would say that cash will give you -3% right now still I have cash even if it does loose me 3% a year. My TIPs fund is for some inflation protection and is up around 5% so far this year.
