TIPS

[Dieter]

As I see it (based on applicable vanguard funds):
* ST TIPS are doing better (less bad) than short term treasuries this year

* Federal Money Market doing better than ST TIPS this year

* All nowhere near keeping up with inflation

* For the past 5 years, ST TIPS wins.

Over 100% higher return than it's nearest competitor, Money Market.

Future mileage may vary

Related Vanguard funds; through 9/30/2022 and then 5yr, per https://investor.vanguard.com/investmen ... ney_market:

Federal Money Market (VMFXX): 0.67% ; 2.77% Yield ; 5yr: 1.06%

ST TIPS (VTAPX) : -4.00% ; 1.56% Yield* ; 5Yr: 2.30%
(2.6 year duration ; Yield doesn't include inflation adjustment)

ST Treasury (VFIRX): -5.12% ; 3.68% Yield ; 5yr: 0.53%
(2.2 year duration)

I-Bonds: 9.62% Yield

And for perspective:

Long Term Treasury (VUSUX) -28.64%; 3.66% Yield (inverted!); 5yr: -1.54%
(16.8 year duration)

TBM (VBTLX) -14.59% ; 3.83% Yield; 5yr: -0.26%


If inflation remains higher than 2.12%, ST TIPS should do better than nominals

[yankees60]

2. Moderate inflation scenario (i.e. more or less what the bond market is expecting over the next few years). 3.7% this year, 2.8% in 2022


When the going gets tough, the tough have to get creative.

1. Exhibit A of how disconnected the actual can turn out to be from what "the bond market is expecting"

2. Love that saying! Original to you?

[yankees60]

But this post on my MSN feed definitely helps me not to worry that much about inflation....

I assume that you were being facetious?

Just over a year later mortgage rates are now around 7% and experiencing one of the fastest increases ever.

[yankees60]

Speaking of brilliance and excellence...D1984s post is well worth the time.

Bottom line is TANSTAAFL; both the TIPS and nominal Treasury markets are some of the most efficient in the world.

+1000

As I am today reading posts in Topics revolving around TIPS that message has continually been coming through loud and clear!