traineeinvestor
Thinks s/he gets paid by the post
I haven't read this book yet, but in other articles Bernstein argues that short term bonds should follow inflation and TIPs would obviously do so as well. I suppose one can get inflation adjusted annuities. Bernstein is US centric so maybe this (short bonds tracking inflation) doesn't happen where you are?
That may well be true - inflation is around 4% out here and the only bonds I can get which come close to at least matching that either involve (IMHO) material credit risk or an FX risk. If I want to match or beat inflation, I have to take some risks.
The local ibonds are okay if you get them on IPO but you can't get enough to be meaningful. As for what the banks sell as annuities out here in HK - they are belong in the same level of financial hell as insurance linked investments scams (basically not really annuities at all). I could buy overseas but (i) that adds an FX risk (ii) there is often a 30% withholding tax taken out of payments and (iii) the fees go up by a lot.