STIP
iShares 0-5 Year TIPS Bond ETF
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Seeking a short-term cash parking lot. Why is the "SEC Yield" so high on iShare's $TIP and what are some other good options?
Buying TIPS VS Investing in ETFs that hold treasuries
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You want a **short-term** treasury fund. >TIP (iShares TIPS Bond ETF) Crashed hard in 2008 because CPI cratered and Lehman was the largest holder of TIPS at the time and dumped them all to raise cash. Also took a beating in 2022 from the rate hikes because intermediate duration (6 years). Both of these things are visible on TIP's full chart (why do people not look at charts?). A **short-term** TIPS fund like VTIP/STIP will have less volatility. VTIP/STIP returns have been better than BSV (nominal treasuries + investment grade corporates) in recent years because higher inflation. >AGG (iShares Core US Aggregate Bond ETF) Not short-term. Treasury holdings will keep it stable tho. Longer duration treasury funds have "crisis alpha" -- they *rise* in value during deflationary shocks. See the performance of TLT or EDV during 2008, Covid, or even this past April for an example. But they are not short-term. Only put in money you don't need for a long time.
Keep a chunk in your HYSA so you can max out I-bonds early next year. They’re at a 1.10% fixed rate plus inflation right now and don’t swing with market yields. STIP or VTIP dropped when rates spiked in 2022. Buying individual TIPS or defined-maturity ETFs and holding to payout keeps that risk down. SGOV is fine for short-term Treasuries, less rate exposure but no inflation bump. Rates can always rise or fall depending on the Fed. For HYSAs you can check updated rates on our website before moving money.
VOO and chill works if your only risk is market volatility, but not if the risk is political or currency instability. VOO = 100% U.S. large caps, so you’re fully tied to the U.S. economy and the dollar. If you actually want political-risk protection, diversification matters: - VOO (40%): U.S. growth core - VXUS (20%): global exposure outside the U.S. - GLDM / IAU (15%) – gold hedge - BIL / SHV (10%) – cash & liquidity - STIP / TIP (10%) – inflation-protected bonds - SCHD / JEPI (5%) – dividend income buffer That mix keeps upside exposure but cushions geopolitical shocks. Not financial advice, just risk management 101.
VT is definitely a solid one ETF solution, globally diversified, 60% US and 40% international, covers nearly 9,000 stocks, and yields around 2%. But for real political-risk protection, it’s still 100% equity exposure. If the goal is to hedge instability, I’d still mix VT with: GLDM or IAU: inflation & crisis hedge BIL or SHV: cash-like stability STIP or TIP: inflation-protected bonds SCHD or JEPI: dividend income & lower volatility So maybe 60% VT + 40% hedges for a balance between growth and protection. Not financial advice, just fundamentals talking.
"All investment entails risk." Treasuries are pretty safe. Or if you're worried about inflation, there's Treasury Inflation-Protected Securities (TIPS). Lower yield but you get some protection if inflation rises more than expected. I like SGOV and STIP respectively. VT will rise and fall with the global market, but it's one of the broadest stock ETFs in existence. Note that it's biased towards US holdings because we have a lot of massive publicly-traded companies; if you want a more balanced mix, add some VXUS or one of the other ex-US international funds. I don't like gold as an asset because it produces nothing and tends to be overbought by doomers and gold bugs IMO, but it's unlikely to fall far, and will probably go up. There's also all the usual recession hedges: utilities, energy, consumer goods, etc. Defense could be a good sector if you think economic/trade wars will lead to increased international aggression, and it tends to be propped up by public spending in any case. Holding cash equivalents makes sense if you think the market's going to downtrend or crash soon. If you think the market will hold steady or go up, better to lump sum now. If you're not sure and want the least possible risk of guessing wrong, DCA.
What do you think the inflation rate will be in 6 months or 1 year? With that inflation rate, would you make more money in SGOV or STIP? If you can't answer these questions, you should probably just buy some of both, or keep everything in standard core bond funds. If you think inflation will be higher than the median expectations of all the bond traders, STIP is better. Inflation going up doesn't make STIP a good investment, it has to go up more than everyone else is expecting. When we all suddenly expect it to go up more, like yesterday, the price up STIP immediately reacts and then, again, you are betting whether inflation will be higher than the (new, higher) median expectations. There is no free lunch. Once it is obvious that inflation will be super high, you can't just buy STIP and do well, because by that point the nominal value of STIP is very high.
I'm almost half in a mix of cash, STIP, SCHD, GDX, and SPY puts - stuff that will weather a downturn (and sell easily), and the puts will print money if I'm right about the second half of the year. The other half is trying to milk short term gains out of the current irrational exuberance and stuff I bought on sale that I think will age well, even if I have to hold it through a downturn.
I have low to medium risk tolerance and always looking at tax advantaged stocks so I’d go with SPY, VOO, SGOV, STIP combo
I’m holding tight on mix of bonds and stocks. Anything I get extra I’ve been throwing on TIP and STIP.
TIPS = treasury inflation protected securities. They operate the same as normal bonds but the real yield could actually be higher than a nominal yield of a normal bond if the interest rate stays the same and inflation increases. TIPS and gold are two of the best hedges against stagflation. tickers: STIP, LTPZ,TIP, SCHP
Even if the market was doing well that isn't a good place for a house down payment. CD, SGOV, HYSA whichever has the highest yield put it there and forget it until you get your house. There is also VTIP and STIP
STIP short term inflation protected Treasuries This will work until the administration goes full Argentina and forces the statistical bureau to lie about inflation
The YIELD on both VTIP & STIP are below 3% so you are sacrificing INTEREST for safety. SGOV has the same safety as the US Dollar & the Yield more than 1% GREATER than yours.
I also like VTIP or STIP for inflation protection.
SGOV and BIL etfs are good suggestions, but I think you can protect yourself against inflation with short-term TIPS funds, like VTIP or STIP. They have longer duration than SGOV or BIL so there is a bit more interest rate risk, but it is worth considering.
STIP if you think there will be more inflation than expected, and the Trump government doesn't force the BLS to start lying about CPI to constructively default on TIPS, the way that Argentina did.
BSV, SCHO, STIP, VCSH, and LQD. See my edit for why but idk anything so, you know, NFA.
I suggest you look into treasury protected securities like VTIP or STIP.
STIP TTING TO JILL OUR ORAIDENT!nb
Have been hanging out in STIP more than a year waiting on Fed to lower short term rates. Have been accumulating TLT for weeks.
The yields are good now. The yields were worse 6-8 months when you initially bought into a bond etf. Hence, the price is down. I have bonds in my main account, but just 10%. And I like to put that in long term bonds (I do VGLT) to specifically take advantage of the inherent volatility in relation to overall size of portfolio. If this is a savings account, and you do not want to risk principle as much, you need to be in shorter term bonds and TIPS for inflation protection. Right now my savings is in SGOV because the yield is really good, but once that goes down, I plan on moving to VGSH and STIP primarily, with maybe 10% in VT. Something like this. https://www.optimizedportfolio.com/invest-emergency-fund/#%e2%80%9cwhat%e2%80%99s-the-best-etf-for-an-emergency-fund%e2%80%9d If you don't mind risking principle more but want to stay conservative, the Harry Browne Permanent Portfolio weathers different economic conditions well and averages a 7% CAGR since the 70s. https://www.optimizedportfolio.com/permanent-portfolio/
Someting to consider about sgov vs most mmf/hysa is that sgov is state tax exempt most mmf like spaxx/vmfxx/fzfxx are not . I assume webull money management is the same. Personal experience wise , I did experiment at end of the last year where I put the same amount of cash into SGOV, USFR, STIP, FDLXX and 3 month Tbill. USFR and 3 month tbill performed the best 3 month tbill you can sell early if you need the liquidity but probably isn't optimal . The best performers were USFR and 3 month tbills. SGOV and FDLXX were similar and STIP had too much interest rate risk , so didn't have the best performance. All of those options had more than 95 percent treasuries so were state tax exempt for me.
I use Fidelity for my longer term EF and just buy 3 month tbills and have them auto re roll. I believe Fidelity is the only broker of the big three that allows for auto re roll. You can do that at treasury direct as well but I feel like dealing with treasury direct can be a pain , and maybe a bit more difficult to sell on secondary market if you have to go that route. I just use a plain old MMF at fidelity paired with cash management account for stuff i may need almost immediately. In my IRA I do have one of fidelity long term treasury index , but I am not going to be touching that anytime soon. I did an experiment end of last year comparing returns for MMF/3 month tbill/SGOV/USFR/STIP. What I learned for longer term, more than 1 month, USFR and 3 month tbills are probably the best. STIP was effected too much by interest rate risk, sgov and mmf are very similar I think. If i were to make a tier list it would be 3 month tbill/USFR/MMF/SGOV/STIP in that order.
Gold is a great diversifier, IAU or IAUM. Physical is best, but gold etfs have low cost and often hold or gain value during market trouble. International equity ETFs like VXUS will be pretty correlated to VTI, but have a good dividend. As for fixed income, I would recommend inflation linked treasuries over nominal treasuries. Either STIP for a shorter duration (lower risk) or TIP for a longer duration; compare to SHY or AGG for nominal treasuries.
SCHP will be paying a dividend of .0856/sh on April 10. This was a similar situation with other TIPs ETFs like STIP and VTIP. Be prepared for highly variable payouts. That's just how these work.
I just spent about 40 minutes looking this thing over. I'm not much into ETFs but I have done some income ETF investing in the past so this kind of interested me. My information comes from Schwab directly. First, this is an index ETF, so it's performance has little to do with the particular fund and is mostly based on the underlying index. So your question is more about the underlying index than about the fund itself. Second, the fund made two payments in Dec22 which it looks like together were the largest monthly payment in several years; overall the payout in '22 looks like it was the best year in quite a while by far. Third, it's not clear to me right off hand why, but a few of the other TIPS funds I found have erratic dividend payments, so this fund isn't unusual in that regard. The Vanguard fund VTIP missed three quarterly dividends in 2020 and one in each of the last two years. The ishares fund STIP did not pay in Oct/Nov 22 and has not yet paid in 23. So SCHP has been the most consistent of the three. Fourth, as to why this happens, perhaps because unlike a stocks, bonds have maturity dates. This fund is restricted to bonds at least one year from maturity, but it doesn't really matter if they mature or fall out of the fund target group, positions must be closed which could result in booking losses that would consume the bond payments. Overall, again because this is an index ETF, it's going to pay out all it can pay out. The question for you is, is a TIPS bond fund the right thing? So that requires looking at the Bloomberg TIPS index and deciding if that's what you think is the right thing.
I got this from IShares: The monthly distribution for STIP/TIP is based on the Non-Seasonally Adjusted CPI measuring period from 3 months prior. This means that the March distribution is based on the December CPI measuring period. During this measuring period, CPI was -0.3, meaning that there was no increase in CPI. When there is no increase in CPI or a negative change in CPI there will not be a distribution paid. If there is an increase in CPI then there would (most likely) be a distribution paid 3 months later. Please see the 'Mechanics of TIPS' PDF (attached) which will explain this in depth. The best place to access the dividend information would be on our website under the “Distribution” section: https://www.ishares.com/us/products/239450/ishares-05-year-tips-bond-etf You can also view the Non-Seasonally Adjusted CPI information on the US Bureau of Labor Statistics website: https://data.bls.gov/timeseries/CUUR0000SA0&output_view=pct_1mth If you have any additional questions, please call 1-800-iShares (474-2737) between 8:30 a.m. and 6:00 p.m. Eastern Time Monday through Friday.
GUYS FUCKING STIP TYPING ITS SO OBVIOUS ITS ABOIT TO BREAK 394 if you want to make money buy calls here I’m not wrong at all watch thank me later
The 25 bps hike was already priced in and barely affected the market. JPow changed the tone a bit and signalled we may have a couple of additional hikes left. This was less hawkish than usual, so equities and bonds went up, as we may soon see a pause. Then Yellen said they hadn't talked about protecting all depositors from defaults and stocks crashed. Your strategy sounds very reasonable. My portfolio right now is: 50% STIP (inflation protected short-term treasuries) 15% VGSH (long-term treasuries) 5% SHP (long inflation protected treasuries) 5% gold ETF 12.5% defensive stocks (half of them foreign) 12.5% growth/tech stocks Make sure the defensive stocks have lots of hard assets (railway companies, farmland, real estate, etc) so they are hedged against inflation and less affected by the loss of revenue in a recession. If the SP500 crashes 15-20% I'll probably start selling the bonds and buying more growth stocks.
Unfortunately it underperformed cash by about 6% due to rising rates https://stockcharts.com/freecharts/perf.php?USFR,STIP&p=5
>The part I'm confused about is ... Aren't TIPS supposed to provide returns (interest) at least as high as inflation? The explanation from Blackrock suggests zero or less return from STIP whenever inflation is not rising (regardless of how high it is). TIPS are supposed to adjust with inflation. When you buy them with a positive real yield and hold to maturity, they should provide pretax returns at least as high as inflation. If you buy with a negative real yield or don't hold to maturity, they may return less. The explanation from Blackrock suggests zero or less return from STIP whenever CPI is not rising. Inflation is not CPI; it is the rate of change of CPI. If CPI is falling, that means inflation is negative. During such a time, TIPS will have a negative principal adjustment, and if they have any coupons, they will pay a positive coupon. They may increase, decrease, or stay the same in market price. ETFs are required to distribute all taxable income they receive, and TIPS principal adjustment is considered taxable income that year, so ETFs distribute an amount equal to that. During negative inflation, they wouldn't have phantom income to distribute.
I've got a question about STIP. I have the impression that it's intended to be a substitute for actually buying treasury inflation protected securities (bonds), which are designed to ensure that the investment at least keeps pace with inflation. More specifically, the bond price fluctuates with CPI while the interest payments are proportional to the bond price. However, I received this response from Blackrock on the matter: > The monthly distribution for STIP/TIP is based on the Non-Seasonally Adjusted CPI measuring period from 3 months prior. This means that the March distribution is based on the December CPI measuring period. During this measuring period, CPI was -0.3, meaning that there was no increase in CPI. When there is no increase in CPI or a negative change in CPI there will not be a distribution paid. If there is an increase in CPI then there would (most likely) be a distribution paid 3 months later. How can STIP be a reasonable alternative for TIPS if it returns nothing (or less) when inflation is not increasing, regardless of how high inflation happens to be?
The part I'm confused about is ... Aren't TIPS supposed to provide returns (interest) at least as high as inflation? The explanation from Blackrock suggests zero or less return from STIP whenever inflation is not rising (regardless of how high it is).
STIP holds short term TIPS. If short term TIPS don't perform well, STIP won't perform well. They will perform exactly the same gross of fees. What is confusing you about that?
Those STIP shares will not pay any dividends if inflation does not go up.
It is more short term. I was thinking of reevaluating when the economic conditions improve. The bonds are meant to gain some value, more than being in a savings account and more than treasuries like STIP etf, in the short term when the economy goes down. I will liquidate my position in VCLT when the economic data looks like it is bottoming and buy more growth orientated etfs like SPGP and XSD semiconductor etf when they are cheaper. I wanted some etf's which would gain a lot in value if there ended up not being a recession and the bonds underperformed.
I like it but recently swapped from $BND to $STIP.
This looks like a pretty generic robo-advisor generated portfolio. It's probably a bit more complicated than it needs to be for a 35 year horizon. But it's not bad - the split out between VEA and VWO for non-US is actually a decent idea. And holding STIP instead of cash is also a good idea. The choice of ETF providers also seems reasonable. The only problem with Robinhood is that you don't have access to fixed income products, mutual funds, and CEFs. So you're kinda limited to the ETFs that are available. It's a perfectly reasonable start for a long term portfolio.
Please rate the portfolio Robinhood created for me on a scale of 1-10 for my first ever ROTH IRA: Asset Allocation IVV: 38% BND: 20% VEA: 13% VWO: 7% SPMO: 6% SPHQ: 6% STIP: 5% IJR: 5% ​ I'm 39 (almost 40) and just now starting to save for retirement. I know I started way too late. I'm looking though for a long term investment strategy so I can retire by age 75. Therefore, my time horizon is 35 years. I live in the United States and I make around $60k a year and have my residence provided for me, however I do not own it at all. I have no 401k or pension. I have no money saved towards retirement at this point. My objective with my investment is to build up some retirement funds. Right now, I plan on investing $3,500 per year. I estimate I will have conservatively about $400k coming to me as inheritance over time. Once our kids are all going to school full time, my wife plans on finding employment and we will either be increasing our retirement contribution and/or purchasing our own home. I consider myself a medium risk tolerance. I realize I waited way too long to have a very low risk tolerance. I have no big debts, my largest debt is a car loan for about $9.5k. I've tried to answer all the key questions that were in the pinned thread description. ​ Therefore, please rate the spread that Robinhood gave me from 1-10, with 1 being the worst end of the scale and 10 being the best. Bonus points for using a Dave Portnoy point system. Also, with a long term investing strategy, how often should I be reexamine my investment strategy? Every month, year, 5 years, shorter or longer?
When will STIP pay the next dividend? It's generally monthly, but there's been nothing for the last two months. Is there a way to determine when the next dividend will be paid?
Ah. Yes there can be delay, and that delay could cost you money. One easy/lazy solution is to use an ETF like STIP or SGOV or even ICSH which are all short term bond funds, and will keep you invested through maturity of individual bonds. Many brokerages will let you set up a bond ladder, Fidelity's Bond Ladder system is pretty good, and will keep you invested auto-buying from maturity on the same day. As for the delay in transferring funds to your brokerage(Fidelity in this case), if you use a wire and not ACH, then it can transfer same day. If your bank and brokerage are the same place(Schwab and Merrill both have their own banks) then you can transfer between them, with basically no delay. But mostly I'd say unless we are talking about reasonable large amounts of money(1M+), a day or two of interest won't be enough to really care about.
tldr; You seem to be talking only about counterparty risk(which is only 1 particular risk). > Goverment bonds are considered as "risk free return". Well, US Government bonds are. Other governments, maybe not. I'm not sure anyone would consider Ukraine's govt bonds to be risk free right now. If Russia wins, there is zero chance they will honour that debt. If Ukraine wins, will they have the money to pay it back? If there is some sort of peace that happens, who the heck knows what happens to the debt. > A bond issued in the home currency will almost 100% be paid if held to maturity. Yup! > A saving account has third-party risks and are only partially backed by the government. In the US, see [FDIC](https://www.fdic.gov). Up to $250k, there is no risk, as long as we assume the US govt exists. A CD is not guaranteed to be covered by the FDIC, but non-FDIC insured CD's are pretty hard(perhaps impossible) to find these days. > A Bond is fully backed by a government.... so how do you have more risk? Because you are only talking about counterparty risk. I'm talking about risk(s) in general. There are plenty of other risks[0]. Volatility risk is one such risk that most people can't handle well. TIPS will absolutely have volatility(meaning the price/NAV will fluctuate). If held to maturity, this is a non-issue. 0: Read the list of risk(s) in the ETF STIP for instance(it's in the prospectus, towards the beginning of the document). Not all of these will necessarily apply to an individual TIP issuance, but many will.
STIP does not express the view OP is taking, that inflation and rates will fall soonish. OP did not say to buy tbonds directly. In the comments they indicate they are looking at ETFs. They are essentially equivalent.
STIP, short term inflation protected treasuries ETF, has dropped considerably and is now paying a dividend north of 6%. Why not use this or something like it instead of dealing with the hassle of bonds directly?
I'm using STIP right now. Super high yield (it's like 10+% now) seems likely to more than offset any further price decrease.
34 years old, $50k in traditional 401K, started at a new company 3 weeks ago, new salary being 90k including annual 8% STIP . I plan to match their 5% match dollar for dollar, if not more than that. $65k in savings account. $10k in checking account. Currently looking at options to invest liquid savings to better my future. I was currently looking at a Roth IRA but open to all options. I'm new to investing.
I recently saw this bond etf called STIP which is a TIPS bond etf. Seems like good dividend [https://www.nasdaq.com/market-activity/funds-and-etfs/tip/dividend-history](https://www.nasdaq.com/market-activity/funds-and-etfs/tip/dividend-history) and bonds have already tanked, is this a good idea? Anyone know of any pitfalls?
If your puts aren't secured by cash, then they aren't cash secured puts anymore, and you are vulnerable to the risk of whatever you're using as collateral. STIP is down 8.5% and SHY is down 5% YTD - if your puts get assigned, you lose big. There are less capital intensive strategies that allow you to write OTM puts, e.g. buying long-term ITM puts (sort of the bearish version of PMCC), but this carries risk.
STIP is down significantly over the last few months, presumably due to rising interest rates. However, the dividend is way up, presumably for the same reason. Looking forward, it seems hard to believe it will drop a great deal further. If inflation moderates and the fed eases up, the value may even increase. Meanwhile, it's paying over 10% annual yield at this point. Is it a good time to get in?
interest is up, bonds price goes down. There will be more rate increase this year, so I think it's very high odds STIP will drop in price
If you don't consider tbills a cash alternative, then STIP is also not a cash alternative.
I see FDLXX, treasury only MMF, but it shows up as taxable. Am I misunderstanding something here? I see FMOXX, tax exempt MMF, which looks quite similar to the above. Both seem to provide yield that looks anemic, like 10x less than what STIP is currently providing. However I'm not sure if I'm reading it correctly so please share insight. That said, I understand STIP may be considered relatively volatile for a cash alternative but I'm curious about its current state in particular. Specifically, its yield is super high while the price has already dropped a ton (see history). What are the odds that it will drop more versus the yield dropping over the same period?
Thanks for this! I've been thinking about tbills instead. Are they also vulnerable to price drops as rates increase? If so, what do you think about the fact that STIP's current yield is more than 2x? Looking into Treasury only MMF at Fidelity now, thanks.
its way too interest rate sensitive for cash alternative IMO, for something cash equivalent for me I probably don't want it to lose any value. STIP and VTIP for that matter have been \~ -2.5% this year, not exactly something you want in a cash like option. I think only reasonable options for cash alternative for me personally is HYSA, MMF , tbills or cds at broker. I tend to prefer Treasury only MMF at vanguard and fidelity they have pretty good yields and are state exempt.
Currently I have 40% of my IRA in CRAZX Columbia risk asset fund. My former financial advisor at Ameriprise bought this position and now I’m self managed at Schwab and wondering should I swap this position for STIP short term treasury inflation protected securities ?
Invest the cash in a TIPS fund like STIP to get monthly dividends. Credit cards are ok as emergency funds unless it’s a systemic risk. In 2008 I had credit limits dropped dramatically even though I hadn’t missed any payments. The banks needed to lower their overall credit exposure and cutting unused credit was an easy way to do that. Keep the cash in a relatively safe fund that collects dividends and keep the credit line open.
Nothing returns exactly the inflation rate, but TIPS are linked to inflation. They can vary in market rice due to changes in real discount rates. Short duration TIPS are more likely to closely mirror inflation, but they also tend to have lower real rates including negative real rates (not to mention taxes reducing the after-tax yield). Recently 5-yr TIPS have risen back into the positive real-yield territory so they are probably what you want: VTIP, STIP for ETFs, or just buy TIPS directly. Unfortunately risk-off often correlates with disinflation and higher illiquidity premiums which don't favor TIPS.
Last year SCHP did great when inflation was roughly 7%. This year it did worse than STIP. I'd still lean towards SCHP, but if stability is more important than STIP is a good choices.
TIP and SCHP have almost identical portfolios and performance https://stockcharts.com/freecharts/perf.php?TIP,SCHP&p=4. STIP is shorter duration so less volatility and less returns on average.
im trying to pick between TIP, STIP and SCHP. Any advice?
And the fact that OP is convinced this is a fakeout could be interpreted as a sign that markets are still being held back… But the fact is that NO ONE KNOWS SHIT AND THATS WHY YOU SHOULD ALWAYS DOLLAR COST AVERAGE AND STIP TRYING TO PREDICT THE FUTURE.
Ah. Nominal bonds are anticorrelated to inflation, so probably not the best choice for that purpose. IEI had a 9% drawdown this year due to spiking inflation. Cash / cash equivalents would be better for unexpectedly high inflation, counterintuitively. TIPS would also be decent for that. SCHP holds TIPS but you probably want shorter duration TIPS for lower volatility, like STIP or VTIP.
As long as inflation persists and we run towards recession buying a TIPS ETF as a hedge isn't such a bad idea (wouldn't buy the bonds directly as a retail investor, volatility is higher, liquidity is lower, really need to know what to buy and when to make it work). Shorter duration like STIP in particular, since it won't take as long to rebalance in reaction to rising rates and when they inevitably drop down again in a recession you can sell it at a premium assuming inflation is tamed.
I have been trading stocks and crypto for over a year and lost more than I care to mention. Still, options seem too risky and I won't touch them. Here is what I have learned: the more you lose, the more tempting it is to be riskier with more money to try to make it back, which in turn you just lose more. Trying to trade and make money on a downturn is tough, especially if you don't have time to keep up with it. If you need the money in the short term, I would say cut you losses and put it in something safe. There isn't a great safe hedge against inflation right now, at least that i have found. Gold isn't doing anything, obviously ETFs are following the market, and even bonds are down. I was looking into high yield savings, but they are only paying 1-1.25% apy. Obviously not keeping up with inflation, but they should go up a little with rate hikes. Some energy and Healthcare stocks might be doing ok. The best safe place I have found that appears it might return dividends that beat inflation is STIP. It is the only bond ETF that isn't dumping. Not to say it won't, but it is holding up pretty good. (When I say dump, I'm talking a few percent which isn't much, but it can be enough to negate the dividends.) The last dividend payment was about 1%. The next dividend payout should be close to the first of the month. If you are going to play with some risk, I have been in SQQQ. It is an ETF 3x short the Nasdaq. TQQQ is the opposite. The Nasdaq has been trading in a downward channel and is sitting on the support line. At this point, I planned to sell SQQQ and buy TQQQ, but I hesitated and held because of the upcoming fed meeting. I felt like the Nasdaq would break support, but it will probably hold and rally since I didn't sell.
Just looking at STIP briefly I see it deals with government bonds. From my knowledge with the Fed and current policy’s I would do more research. Because of the quantitative tightening this might not be the best way to go. Honestly I don’t see anything you could swing in 3-6 months in green, it’s just too uncertain. If you had the value of time I would personally do a safe ETF and hold for a year or 2.
Without giving any investment advice, I will say that a government short term bond fund like STIP will be far less risky than any equity fund, while offering a decent yield.
I’ve been looking into STIP bond etf. With the past CPI data news the STIP was moving in the range of around $4. I’m fine with that range, and their dividend return seems pretty reasonable as well. It’s a 5 year bond which is a solid range for us. Do you have any idea about that bond or something similar? Thank you for the response
STIP is a short to intermediate term TIPS fund. TIPS = Treasury Inflation Protected Securities This fund holds Inflation linked bonds backed by the full faith and credit of the US Government. It will have 2 aspects to its yield: - stated interest rate - inflation adjustment In a highly inflationary environment this fund will perform better than equivalent normal short term bond funds, because of the inflation adjustment. However there is a certain “breakeven rate” where the fund could return less than a normal bond fund, if the inflation rate drops below the breakeven rate.
I guess I worded the question wrong or was too lazy to write some more. I understand that you’ve got to pick and choose the bonds just like any other investments. I was looking at the more short dates bond etfs such as STIP. From what I saw, it only fluctuates by $6 max. I’m fine with those levels or volatility and with the dividend return on it as well. Am I missing something about that or maybe you have anything to say about the 5 year bonds?
I was looking at bond etfs on the lower side of risk. One in mind I had was the STIP 5 year bond. While past performances doesn’t always correlate to the future one, STIP only fluctuated in the range of $6 throughout this year’s events. I’m fine with those kinds of fluctuations, and the dividend payout ratio seems fine to me as well. Am I missing something about that bond etf or do you have any comments about it maybe?
[Kinda but up and down from starting point](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2022&firstMonth=1&endYear=2022&lastMonth=6&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTIP&allocation1_1=100&symbol2=STIP&allocation2_2=100)
Someone tell me why this is stupid. STIP is 7.3% yield, and my broker will let me buy 3x with margin. Safe 22% this year? Literally can’t go tits up?
Probably the wrong place to ask... but WTF... If somebody is mostly cash - is there really any downside to sticking a bunch of it into something like STIP or VTIP?
Nah I’m mostly cash with long gold calls, shares STIP, TLT, and degen qqq plays
I'm 69 with all my investments in IRAs. Mid way through 2021 I moved all my BND into STIP. Just hiding out in STIP to preserve capital.
Go paper trade for a while and leave your money in something like 90% VOO and 10% STIP. Rebalance annualy. You don't understand options well enough to trade them. Fuck, just pay an investment advisor 1% a year to watch your money. You'll still be better off. You really should not be investing in options if you're this confused.
You're right about everything. It's still a fantastic investment. You can also get exposure via inflation-inked ETFS like STIP.
Nope, TIP/VTIP/STIP are made up of a different type of inflation bond but similar. [https://www.bogleheads.org/wiki/I\_Bonds\_vs\_TIPS](https://www.bogleheads.org/wiki/I_Bonds_vs_TIPS)
Dumb question since I think the answer is no, but here goes: Is there an ETF that tracks/invest in these? Are the tickers TIP, VTIP, or STIP a similar (or same) asset underneath?
I have a large cash allocation because much of my portfolio is leveraged. I'm trying to decide if some or all of my cash position should be in STIP shares. Obviously there's interest rate risk, but since that mostly seems linked to the Fed fighting higher than expected inflation, I'm having trouble deciding how much of an issue that is for this particular idea. For reference, I made a chart that (I think) shows the purchasing power of STIP, the US Dollar, and Gold. [https://www.tradingview.com/x/p39KkXkX/](https://www.tradingview.com/x/p39KkXkX/) P.S. Yes I made an identical post asking this question, I wasn't trying to spam, just wasn't sure if this was better as a comment in the general discussion or as it's own post.
Unlike Series I savings bonds, TIPS are not inherently advantageous during periods of high inflation. TIPS are marketable securities like other bonds, and carry the same risks. If you believe inflation will be *unexpectedly* high, it makes sense to buy TIPS bonds. If you believe inflation will be unexpectedly low, it makes sense to take a short position. And because they're traded on the secondary market, you don't need to buy them individually. You can hold them more easily through a fund. There are many funds: [DFIP](https://us.dimensional.com/etfs/dfip/inflation-protected-securities-etf) / [FIPDX](https://fundresearch.fidelity.com/mutual-funds/summary/31635T104) / [VTIP](https://investor.vanguard.com/investment-products/etfs/profile/vtip) / [VIPSX](https://investor.vanguard.com/investment-products/mutual-funds/profile/vipsx) / [STIP](https://www.ishares.com/us/products/239450/ishares-05-year-tips-bond-etf) / [TIP](https://www.ishares.com/us/products/239467/ishares-tips-bond-etf) / [SPIP](https://www.ssga.com/us/en/individual/etfs/funds/spdr-portfolio-tips-etf-spip) / [SCHP](https://www.schwabassetmanagement.com/products/schp) / [PBTP](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=PBTP). Some focus on short-term TIPS.
if you believe inflation is going to persist then federal treasure bonds which are inflation adjusted. They always pay more than inflation eg STIP SCHP etc
I know he is joking but STIP and SCHP are good inflation adjusted bonds
That sucks… I’ve never accepted an LTIP only contract. I always try and work it in, but only after I understand my STIP baseline first. I’d rather have consistency. Im not in tech but there are for sure a ton of people who made a shit ton off LTIP the last few years with companies going IPO any time a CEO farts and the company gets some insane valuation, but that is not reality nor is it the norm.
Is this why bonds are moving today? Can someone explain why STIP is up 1.16% in pre-market, while TIP is down 0.33%? And BND down slightly also. If higher rates mean existing bonds go down in price, why is STIP up so much?
STIP: inflation protected short term US treasury bonds. Better interest than savings. Low downside risk compared to stocks.
The yields on these bonds is always less due to the indexed to inflation feature. Leaps would be a cheaper way to get exposure with leverage cheaper. I don't think TIPs really track the true inflation rate, though that's arguable. In addition they typical tips fund has medium term bonds which will be sensitive to rising interest rates, and that can be substantial As part of a diversified inflation busting portfolio, go for it. by itself, no. Consider STIP etc for shorter duration.
$CEI 97% short KERRISDALE JUST SAID ON LIVE THEY HAVENT COVERED. WE PUSH THEY BURN. STIP TSLKING ABOUT SPY YOU PUSSIES.
TIPS bonds. Treasury Inflation Protected Securities. ETFs like TDTT/TDTF and STIP/TIP. A kind of treasury bond that's indexed to inflation; their face value actually rises with inflation so there's actual price gain potential unlike normal bond funds. Low price fluctuation and "good" yields of 2-3%. As good as popular dividend yield ETFs like VYM. No, even they don't beat inflation, but IMO it's a good hedge and strategic position to see what happens in the next couple years while still getting a decent yield. That used to be short to intermediate term treasury bonds like VGSH. But the yields are just shit right now. You're better off holding straight cash than regular treasury bonds right now because the shit yields don't even come close to compensating for the price fluctuation. Corporate bonds are another option. Like VTC. Or just high dividend stocks. The aforementioned VYM, the oil supermajors (oil is still gonna be around in a big way for a while yet), T, etc. I'm also not currently opposed to the idea of cashing out some profits from these record highs and holding some cash for a while. Inflation isn't going to destroy anybody's cash value in a year or two, especially if they have just a reasonably small percentage in cash.
For sure. Check [this chart](https://i.imgur.com/LJ3iN2w.png) out comparing STIP (orange line) to VGLT (blue line), Vanguard's long term treasury bond ETF. Yeah, if you had been lucky enough to hold a large position in VGLT in the March 2020 crash, you could have sold at a profit and bought stocks at a discount. But other than that, the price fluctuation is quite substantial, yields are shit right now and when yields go back up, the price will go down. Not a great buy IMO. TIPS are much more stable, recover quickly from a crash, and gain with inflation, plus the nice yield. Personally, I've taken profits recently from stuff like VOO and moved about 25% of my value into a mix of TIPS, higher yield corporate bonds with a bit less volatility (VTC), and straight cash. That's quite conservative and cautious. Everyone has to figure out a plan that works for their goals and portfolio value.
S&P is ridiculously, unsustainably overvalued. Yes, it can go higher, but not forever in the near-term. Very long term, sure. I'm not saying cash out, not at all. But maybe shift some profits to stuff like TIPS (Treasury Inflation Protected Securities) ETFs like STIP to better position yourself to take advantage of a major pullback. Their face value rises with inflation, pretty low volatility/risk, and yield competitive with major dividend stock ETFs at 2-3%. For reference, in the March 2020 crash, STIP only briefly dipped about 2% and then immediately went back up a couple weeks later. It's a good inflation and market volatility hedge, and can be a strategic position to take advantage of pullback stock prices. Just my two cents. Also, nice humble brag, lol. (Kidding, but also not really.)
Extremely interesting, thank you very much for taking the time to explain your thought process for the construction of this part of your portfolio. I especially liked the idea of holding both treasuries and target maturity bonds together and letting the target maturity bonds run down, that's a smart idea, and I think I'm going to incorporate it. I hold VGSH and STIP at the moment for my fixed income allocation, but I'll start moving into these as well. Thank you for the advice!