Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
TIPS (Treasury type TIPS)
Old 05-15-2021, 05:52 PM   #1
Recycles dryer sheets
 
Join Date: Aug 2013
Location: Pebble Beach & Cocoa Beach
Posts: 257
TIPS (Treasury type TIPS)

A question to the TIPS investors on the forum. What is the best/least difficult way to invest in TIPS, while considering associated costs of buying/selling. May be selling a house on the beach in California, and TIPS would probably be a wise place to park the $$. Of course, open to any suggestions besides TIPS. (note - I have a Schwab account if that is helpful or not)...



Thanks!
gooddog 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 05-15-2021, 07:01 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,346
TIPS rates are pretty low right now, generally below inflation rates, so personally I am holding off adding any new issues myself. The shortest maturity is 5 years on new issues. When I do buy them I usually buy new issues through Fidelity at auction times. If you sign up for Fidelity new issue offering alerts, they will tell you when the TIPS auctions are coming up about a week ahead of time. The alerts have the expected yield, which may change based on demand, but usually end up being pretty close to Fidelity's estimates. If you place your own order with Fidelity via their online system, they do not charge a fee on new issues bought at auction. There is a small service charge for representative assisted purchases.

You can also buy and sell TIPS on the secondary market. The current offerings are listed on Fidelity's fixed income offerings page near where the CD offerings are published.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 05-15-2021, 07:29 PM   #3
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 3,287
I recently put some money into corporate and taxable municipal bonds in the form of an intermediate term bond ladder. The bond analyst I spoke to at Schwab didnít recommend tax exempt municipal bonds or TIPS, saying they are way overpriced. Corporate and taxable municipal bonds have a better, though not great, return. But if interest rates go up, as the closer to maturity bonds are sold, the funds will be invested into (hopefully) higher yielding bonds. Itís too soon to tell if they are correct, but so far so good.
Dash man is online now   Reply With Quote
Old 05-16-2021, 04:57 AM   #4
Full time employment: Posting here.
 
Join Date: Oct 2011
Location: London
Posts: 793
I keep 5% of my AA in TIPS via the SCHP ETF.

I know there is a school of thought that TIPS is more of a "Go big or Go home" investment, but I few inflation protection like just about anything else in life. Do it slowly, consistently and over the long term. It creates one more rebalancing variable as well.
__________________
Luck is when Preparation meets Opportunity.
Closet_Gamer is offline   Reply With Quote
Old 05-16-2021, 06:54 AM   #5
Full time employment: Posting here.
 
Join Date: May 2007
Posts: 555
You may already know this, but if you are going to buy TIPs bonds (as opposed to ETFs), you're better off holding them in a retirement account than a taxable account. They accumulate a "phantom" income that doesn't pay out until the bond matures, but you are taxed on that income each year if held in a taxable account.

The ETFs actually pay out that income so at least you are receiving what you're taxed on each year.

Also, if you are interested in buying bonds, you might find this tentative schedule helpful: https://www.treasury.gov/resource-ce...s/auctions.pdf
ksr is online now   Reply With Quote
Old 05-16-2021, 07:19 AM   #6
Dryer sheet aficionado
tsoispf's Avatar
 
Join Date: Jan 2014
Posts: 31
The iShares TIPS Bond ETF (TIP) has treated me well for the past several months when compared to the iShares Core U.S. Aggregate Bond ETF (AGG) where I would normally be holding bonds.
tsoispf is offline   Reply With Quote
Old 05-16-2021, 08:17 AM   #7
Recycles dryer sheets
 
Join Date: Aug 2013
Location: Pebble Beach & Cocoa Beach
Posts: 257
Thanks for the heads up on the tax situation with these. Will be in a taxable account, so ETF it is. Might look at an alternative. Appreciate the info.
gooddog is offline   Reply With Quote
Old 05-16-2021, 09:07 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 7,425
Quote:
Originally Posted by gooddog View Post
A question to the TIPS investors on the forum. What is the best/least difficult way to invest in TIPS, while considering associated costs of buying/selling. May be selling a house on the beach in California, and TIPS would probably be a wise place to park the $$. Of course, open to any suggestions besides TIPS. (note - I have a Schwab account if that is helpful or not)...



Thanks!
Bonds are kind of risky now I think. If you look at real rates they are negative: https://www.treasury.gov/resource-ce...data=realyield

I would go with value stocks which may keep moving up as economy reopens. But you will have to accept the risk. The only choice for governments right now is to run hot economies.
Lsbcal is offline   Reply With Quote
Old 05-16-2021, 01:43 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 7,346
One thing to keep in mind is that TIPS funds and TIPS bonds have different characteristics. TIPS bond funds never mature, so you are not guaranteed of receiving your principal back, plus they have added fees tacked on. Pros and cons are listed here - TIPS Mutual Funds - Pros and Cons (thebalance.com)
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 05-16-2021, 02:10 PM   #10
Thinks s/he gets paid by the post
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 1,754
Quote:
Originally Posted by Lsbcal View Post
Bonds are kind of risky now I think. If you look at real rates they are negative: https://www.treasury.gov/resource-ce...data=realyield

I would go with value stocks which may keep moving up as economy reopens. But you will have to accept the risk. The only choice for governments right now is to run hot economies.
So forget bonds and put it all in the stock market? That sounds a little dangerous to me. Bonds are for ballast, not returns- especially government bonds. If you want 100% stocks in retirement, you better be ok with losing 50% of your portfolio in a major bear.
__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 05-16-2021, 05:07 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 7,425
Quote:
Originally Posted by VanWinkle View Post
So forget bonds and put it all in the stock market? That sounds a little dangerous to me. Bonds are for ballast, not returns- especially government bonds. If you want 100% stocks in retirement, you better be ok with losing 50% of your portfolio in a major bear.
I didn't say put 100% in stocks.
Lsbcal is offline   Reply With Quote
Old 05-16-2021, 06:36 PM   #12
Thinks s/he gets paid by the post
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 1,754
Quote:
Originally Posted by Lsbcal View Post
I didn't say put 100% in stocks.
My apologies then, but bonds to value stocks sounded like going all equities. My mistake.
__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 05-18-2021, 06:18 PM   #13
Dryer sheet wannabe
 
Join Date: Feb 2020
Posts: 10
Vanguard has a short term TIPS etf, VTIP. It has gone up recently. You can watch it and get in on a downturn, I did.
Math is online now   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


Similar Threads
Thread Thread Starter Forum Replies Last Post
when are treasury bond etf's not treasury bond etf's ? mathjak107 FIRE and Money 1 07-20-2015 08:26 AM
Treasury discontinues 20-year TIPS Maurice FIRE and Money 1 11-06-2009 01:58 PM
TIPS&Treasury spreads Fido,VG,SellDirect lazyday FIRE and Money 1 01-27-2006 10:07 AM
US Treasury to auction 20-Year TIPS intercst FIRE and Money 0 05-13-2004 08:40 AM
TIPS vs. Mutual Fund with TIPS? Telly FIRE and Money 12 07-16-2003 11:21 AM

» Quick Links

 
All times are GMT -6. The time now is 02:03 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.