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Originally Posted by Cut-Throat
I'll bring this thread to the top again as there were a few unanswered questions.
I have another question. Speculative.
If you had to guess, what interest rate do you think the Vanguard TIPS fund would pay over the CPI (real) over the next 10-20 years? In APR.
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I can think of a couple people here who might disagree with me, but here goes.
You can do all of the models, calculations, bootstrapping, backward induction,etc etc etc The fact is that most of them are not going to be more accurate than the current yield.
So, in short, your current yield is the best estimate of future yield. Now with TIPS you are relying on the BLS' calculations, but looking at the long term TIPS and the market is pricing in a similar inflation estimate.
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