In a followup article on Tipswatch posted today, 6/30/2024, David Enna makes what I think is a good argument, with strong references, that his analysis is that now is a good time to consider TIPS or I Bonds.
It may be best to avoid acting on analysis or forecasts around any elections, better to prepare/hedge for any outcome, inflationary or deflationary. I’ll continue to hold nominal and inflation-indexed bonds no matter what happens in November.
If you look at an analysis Enna did of when nominals have topped TIPS on yield vs inflation, and vice versa, it swings both ways. He has that piece linked in the main TIPS Watch header as TIPS v. Nominals.
As Adam Grossman wisely says: “Aim for the middle of the road”. Or at least avoid the extremes.
I also plan to continue to hold nominal and inflation-indexed US bonds no matter what happens in November. For myself the statement that Mr. Enna makes that resonates the most with me is in his Q&A on TIPS when he writes First off, I want to state loudly that TIPS are for preserving wealth, not building wealth. I expect those of us who are already invested in TIPS (and nominal bonds) will not change anything investment wise after the election. My question to myself in the past was should I as an investor consider TIPS as part of my asset allocation. The continued pace of borrowing by our government encourages me to own TIPS for the buying power protection from unexpected inflation.
Further, I find Adam’s middle of the road position on bonds as well as the percentage of my equities I hold in foreign equities also works well for me.
I am a fan of TIPS for my “don’t mess up” money. I am 48 and I have been buying 15-20 year TIPS in my Rollover IRA so I have reliable funds available to me in the years before I take Social Security. Most of the funds are still in stocks, but I eventually plan to shift more of my funds to TIPS in that account as I get closer to retirement.
In a followup article on Tipswatch posted today, 6/30/2024, David Enna makes what I think is a good argument, with strong references, that his analysis is that now is a good time to consider TIPS or I Bonds.
https://tipswatch.com/2024/06/30/debate-aftermath-barlclays-says-buy-inflation-protection/
It may be best to avoid acting on analysis or forecasts around any elections, better to prepare/hedge for any outcome, inflationary or deflationary. I’ll continue to hold nominal and inflation-indexed bonds no matter what happens in November.
If you look at an analysis Enna did of when nominals have topped TIPS on yield vs inflation, and vice versa, it swings both ways. He has that piece linked in the main TIPS Watch header as TIPS v. Nominals.
As Adam Grossman wisely says: “Aim for the middle of the road”. Or at least avoid the extremes.
I also plan to continue to hold nominal and inflation-indexed US bonds no matter what happens in November. For myself the statement that Mr. Enna makes that resonates the most with me is in his Q&A on TIPS when he writes First off, I want to state loudly that TIPS are for preserving wealth, not building wealth. I expect those of us who are already invested in TIPS (and nominal bonds) will not change anything investment wise after the election. My question to myself in the past was should I as an investor consider TIPS as part of my asset allocation. The continued pace of borrowing by our government encourages me to own TIPS for the buying power protection from unexpected inflation.
Further, I find Adam’s middle of the road position on bonds as well as the percentage of my equities I hold in foreign equities also works well for me.
I am a fan of TIPS for my “don’t mess up” money. I am 48 and I have been buying 15-20 year TIPS in my Rollover IRA so I have reliable funds available to me in the years before I take Social Security. Most of the funds are still in stocks, but I eventually plan to shift more of my funds to TIPS in that account as I get closer to retirement.
David Enna thinks the recent 5y TIPS auction was priced pretty well given the 5y nominal and inflation outlook:
Treasury Inflation-Protected Securities | TIPS: Perfect investment for imperfect times? News, ideas, alerts (tipswatch.com)
New issue TIPS are paying around 2% real yield. My allocation calls for half my bonds to be TIPS and I Bonds (hedging my bets).