Join Early Retirement Today
Thread Tools Search this Thread Display Modes
How to Hedge Inflation - tax issues w VTIP.
Old 03-07-2016, 03:50 PM   #1
Thinks s/he gets paid by the post
gcgang's Avatar
Join Date: Sep 2012
Posts: 1,022
How to Hedge Inflation - tax issues w VTIP.

Inflation: How‚€”and Why‚€”to Hedge It Now - Barron's

This weeks Barron's has an article "How to Hedge Inflation-and Why Now" recommending using short term TIP funds as their yield spread vs coupon Treasuries is very low, making TIPs relatively more attractive/cheap.

VTIP is Vanguard 2.6 yr duration Tip fund. My question involves tax treatment in a taxable account. As there is both coupon and "imputed(?)" interest, how do you keep track of your cost basis?

Also, they mention some closed end funds that are selling at historically high discounts to NAV, WIW and WIA. Anyone have any experience with tax aspects of these?

In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is online now   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 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 03-07-2016, 03:57 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
Join Date: Sep 2005
Posts: 5,381
Seems like Barron's maybe sat on the story for too long.

I bought 5 yr TIPS at the last auction in December because the real yield had climbed to 40bp. Today they're quoted at 6bp.

As to your original question, each TIPS has it's own CPI reference date and index ratio so you can keep track of the inflation accrual.

I have no idea how the funds work because whenever I buy TIPS I buy them directly at auction. I'm looking to sell mine now if you're interested.
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote

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

Similar Threads
Thread Thread Starter Forum Replies Last Post
Gold or Stocks: Which is the better inflation hedge? Keim FIRE and Money 32 03-16-2012 04:27 AM
inflation hedge alternatives bradh Stock Picking and Market Strategy 22 12-11-2010 12:55 PM
Energy Inflation Hedge chinaco FIRE and Money 20 12-08-2010 08:38 PM
Vacation Home as an Inflation Hedge? Beer man Other topics 10 02-07-2010 02:07 PM
Better inflation hedge: TIPs or Wellesley? Rich_by_the_Bay FIRE and Money 87 05-04-2007 05:48 PM


All times are GMT -6. The time now is 11:30 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.