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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-02-2007, 06:10 PM   #81
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Re: Better inflation hedge: TIPs or Wellesley?

Instant message me when you all reach consensus - I'm plunking the stash in a sock till then. Socks i understand, even if my investment in socks tends to dissapear. Stocks and bongs, not so much.
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-02-2007, 06:15 PM   #82
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Re: Better inflation hedge: TIPs or Wellesley?

Quote:
Originally Posted by calmloki

Socks i understand, even if my investment in socks tends to dissapear. Stocks and bongs, not so much.
Your investments seem to just go up in smoke I suppose...

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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-03-2007, 04:23 AM   #83
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Re: Better inflation hedge: TIPs or Wellesley?

Socks are O.K. but balloons are a better inflation hedge.

Just plot the last 10 years of returns on balloons vs. socks and even an idiot could see the difference.
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-03-2007, 10:27 AM   #84
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Re: Better inflation hedge: TIPs or Wellesley?

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Originally Posted by REWahoo!
Your investments seem to just go up in smoke I suppose...
But this could be the answer to "Whattaya saving for?
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-04-2007, 08:28 AM   #85
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Re: Better inflation hedge: TIPs or Wellesley?

Perhaps this is the wrong place to ask, but....
does anyone have/think about deflation hedging? Long bonds and cash come to mind. We don't have any long bonds and usually think of our cash as a reserve for portfolio withdrawals during "bad" markets. We have some Vanguard Asset Allocation fund which can hold long term treasuries, so maybe that counts (assuming the managers have the foresight to go long bonds appropriately!).
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-04-2007, 08:51 AM   #86
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Re: Better inflation hedge: TIPs or Wellesley?

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Originally Posted by WilliamG
Perhaps this is the wrong place to ask, but....
does anyone have/think about deflation hedging? Long bonds and cash come to mind.
I don't bother to do deflation hedging. I think the US has proven since WW2 that given a modern large government presence in the economy and plenty of political will which we have in spades deflation is just not going to happen. They don't call Mr. Bernanke Helicopter Ben for nothing!

But if you want to hedge, long term straight treasuries are the way to go. Cash is better than many things, but S. T. interest rates can fall very low- though given enough deflation, still positive on a real basis. You would want to to stay away from anything other than US govt debt to hedge against US deflation.

Ha
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-04-2007, 09:11 AM   #87
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Re: Better inflation hedge: TIPs or Wellesley?

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But if you want to hedge, long term straight treasuries are the way to go.
Yup. a 30 year US treasury is the gold standard for deflation hedging.
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Re: Better inflation hedge: TIPs or Wellesley?
Old 05-04-2007, 05:48 PM   #88
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Re: Better inflation hedge: TIPs or Wellesley?

best deflation hedge 30 year zero coupon treasuries. they rise or fall about 30% with every 1 point change in rates
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