Gearhead Jim
Full time employment: Posting here.
My portfolio, like many others, contains fixed income securities to reduce volitility. Since I'm now ER and taking distributions, I don't want to be forced to sell assets while they are down; as can happen with an all-equities portfolio.
The problem is, I notice that the Vanguard Inflation Protected fund VIPSX had a significant decline during the last year. Sure, it's going back up now but was down about 12% at one point. Looking at the Vanguard Intermediate Treasury and Long Term Treasury funds; they were quite close to VIPSX during the good years but performed much better during this last year.
CD's and individual bonds (with all the caveats) can be laddered so you should never need to sell during a down period, but there seems to be no way to really avoid that with a fund.
My questions are:
Why did VIPSX or other TIPS funds decline during the previous year
and
Is there any way to avoid that volitility without buying individual bonds (again, with lots of caveats) or CD's?
and
Can someone graph the results of a 5 year CD ladder over the last 10, 5, 3, and 1 years; to make a comparison with the Vanguard funds?
Finally, we are probably coming to the end of a long period of declining inflation. The next ten years may not be like the last ten. You are welcome to comment on how these investments will perform if inflation starts up again, but remember that higher inflation is merely a possibility, not a guarantee.
Thanks!
The problem is, I notice that the Vanguard Inflation Protected fund VIPSX had a significant decline during the last year. Sure, it's going back up now but was down about 12% at one point. Looking at the Vanguard Intermediate Treasury and Long Term Treasury funds; they were quite close to VIPSX during the good years but performed much better during this last year.
CD's and individual bonds (with all the caveats) can be laddered so you should never need to sell during a down period, but there seems to be no way to really avoid that with a fund.
My questions are:
Why did VIPSX or other TIPS funds decline during the previous year
and
Is there any way to avoid that volitility without buying individual bonds (again, with lots of caveats) or CD's?
and
Can someone graph the results of a 5 year CD ladder over the last 10, 5, 3, and 1 years; to make a comparison with the Vanguard funds?
Finally, we are probably coming to the end of a long period of declining inflation. The next ten years may not be like the last ten. You are welcome to comment on how these investments will perform if inflation starts up again, but remember that higher inflation is merely a possibility, not a guarantee.
Thanks!