TIPS

Full_Pear449

Elon will report a Q1 net loss of $4.13bln , for all of 2025 net loss of $4.95bln. He lost almost as much in Q1 than he lost in all of 2025. In his own words he said in an interiew with The Economist he expects losses for 5yrs. Say what you want about his SMARTS, my Etf shorts (3) are up on average 50%. SO, yes, at some point I toooooo go long but not for the seeable future. I have a seperate Tresaure Portfolio. Very short, short. 10's & 30's. Current 10yr yld is 4.66% which if that were to remain till aug auction would make a 4.55% coupon at next auction. Deficit will continue to rise until we elect a new President. Next Fed meeting in Sept. will be when Fed need sto make a more and raise their Benchmark Funds Rate. This is more psychogical then economic. On average Fed Funds movements take 6months or so to impact the economy. One immeadiate impact will be on the current mortgage Rate and new home construction and existing home sales. Rates right now are between 6.65-6.75. 25bp raise could bring them over the psychology barrier of 7% YES we ahve TIPS, don't play in them , not sure why just don't. ChangXin Memory Technologies (CXMT) is featured on the Pentagon’s Section 1260H list of Chinese military companies, faces strict federal procurement restrictions, and remains a primary target for potential U.S. Commerce Department Entity List blacklisting. A bipartisan group of US senators urged Apple Inc. to abandon any efforts to buy chips from blacklisted Chinese semiconductor suppliers CXMT Corp. and Yangtze Memory Technologies Co.,

Rocco_z_brain

Closing price-earnings discount is not a bad thing to happen, right? And yes, they were successful with raising the cash for their semiconductor plants. They want also to build some in US, so I am not sure where the ADR cash will be going, but they'll need it and it is a competitive advantage e.g. against the Chinese CMTX. Google's free cashflow burn does not seem that bad to me, since I was wondering what are those companies about to do with all that money reserves. It seems that now they have good opportunities to invest in their own business reasonably. Elong is very good in marketing, he is a genius. I will not comment on that. For Treasuries - how do you think the story will go with the US deficit? This is something I completely don't understand. With this spending rates rising inflation is inevitable, then your 30s are cooked - don't you think? You have those TIPS in the US, I always thought those would be interesting. Germany stopped inlation-linked securties issue unfortunately...

skilliard7

Your advice is outdated from when the 10 year yielded less than 4%, inflation was 8+%, and the SP500 CAPE ratio was sub 30. Right now 30 year bonds yield over 5.2%. and inflation protected bonds yield over 3%. At current interest rates, a 30 year TIPS will double in value over 30 years after adjusting for inflation. So the idea that it's a "massive inflation drag" is downright false. The equity risk premium has not been this small since 1999.

Bennie-Factors

We can pick in choose time windows all we want to prove points. SpaceX was a great buy for 24 hours. The best ever. Now...not so much. Seems SPY and GLD track back to early 90s on yahoo finance. And SPY is about double gold that time. And up 700%. And inflation is about 138% or 1 dollar is now $2.38. Take an average TIPS over that time and think those are about 5% annualized. So based on rule of 72 we are about $4 in relatively guaranteed cash return.

NoCommonDog

Oh for god sake, just go full port memory stocks, make a million dollars in the next 12-18 months, take profits and buy TIPS, gold, and VOO. After that you'll only need a part time job to get by comfortably.

Overhaul2977

I hold a small amount of\~8% of my holdings, in gold. None of it is physical, it is all in gold ETFs, and it is a long-term inflation hedge for when I’ll retire in \~25 years, because fiscal dominance becomes a concern in the long-run to me. Fiscal dominance is when the government’s debt becomes so massive that the central bank is forced to choose between printing money to avoid government debt, or allowing a sovereign debt collapse. Any federal reserve in their right mind will choose to print money - leading to the central bank no longer being independent, because they are focused on keeping the government solvent rather than on monetary policy. This isn’t unique to the USA - China, France, Italy, Japan, and lots of developing countries (Argentina, Pakistani, Egypt, etc.) are all facing a long-term debt crisis. This is a global concern that normal diversification through a global stock index cannot avoid. For me, gold is hedge against a moderate chance that many governments will not get their act together, leading to a high inflation and low growth economic period. This makes far more sense to me than government bonds, which carry heavy exposure in a fiscal dominance situation. In fiscal dominance - the federal reserve will buy the government bonds, keeping yields suppressed far below market - so the government stays solvent. If you’re heavily invested later in life into bonds, you’ll face heavy losses in real terms - as your real yield will be negative adjusted for inflation. You can avoid this with TIPS bonds - but I expect in the future that the index used for TIPS will likely be adjusted so it truly doesn’t stay in-line with real inflation. In fiscal dominance, the stock market will also likely face a P/E suppression. Higher inflation leads investors to demand higher discount rates, which historically compresses high-valuation P/E multiples (especially for speculative growth stocks). The major issue with gold, that mostly physical buyers overlook, is gold is taxed as a collectible (28%) - you do not get the lower capital gains benefit on it. I personally keep my gold in a Roth IRA to shield from this. Without a tax shield, your real return on gold will likely be negative adjusted for taxes, because inflation will nominally increase the value and the 28% tax rate will consume those “gains”. It’s really just a hedge, offsetting some of what I’d normally use as bonds. I wouldn’t replace my stocks with it, because gold provides no real return. It is a replacement for bonds - which are already offering fairly poor inflation adjusted returns today.

VerdantPathfinder

5 year TIPS ladder, the rest in S&P500 index fund, and retire.

jawohlmeinherr

Hedgefunds like bridgewater are replacing nominal bonds with TIPS at a 4:7 ratio

D74248

The TIPS market is $1.6 trillion, so clearly some people see benefit.

D74248

A third choice is to buy TIPS and hold them to maturity.

Art_Crime

I cant believe you're in the investing sub and you don't know how to hedge against inflation. Equities, TIPS, some savings accounts, and arguably gold all hedge against inflation. If you want to hedge against inflation then inveT.

kbokwx

Will it match the inflation you actually experience? Maybe not, but its a fairly well established measure, I personally dont let that bother me (its used for TIPS and iBonds).

kbokwx

Me too. The government talks a good talk, but so far actions haven't met rhetoric. A debttor nation needs inflation so they can pay back debt with inflated money. Look to include some iBonds and TIPS in your bond portfolio. Natural resource companies are also good hedges.

bam2350

State income taxes don't apply? Then be sure to include munis that avoid federal taxes. Control costs now. If you're trying to amass wealth on top on the guaranteed 80K/month, more savings early in the timeframe is a real advantage. Likewise, keep after it. If the person is willing/able to work at it some, direct investment into property might be an option to do some tax things. REIT likely wouldn't have the tax advantages but could provide the diversification. One possible allocation could look like this: 25% SGOV or similar, 25% FLMI or similar, 15% international index fund, 35% broad US index such as VOO/VTI/SPYM. If 50% stocks is more than your comfort, dial it back into TIPS and/or SGOV (RETI and/or property fits here too).

Yottahz

What are you guys buying? I just bought $160k of 30 year TIPS at 2.9% real, 2.375% coupon.

musing_codger

I spread my money across us stocks, intl stocks. TIPS, and nominal bonds

Wheaties4brkfst

No? Because if everyone rushes to buy TIPS the real yield declines. This is where it helps to know how things actually work. Everyone rushing to buy TIPS makes it cheaper for the government to issue them. People flocking to buy TIPS does not magically increase the amount of interest the government has to pay. It in fact does the opposite. Ironic of you to say having a strong background in math helps when you completely skipped doing any math at all lmfao. Please rework your example with actual numbers I.e. include the real yield of the TIPS so you can see your mistake.

qroshan

This is where having strong Math background helps. Assume USG has $1T in Tax Revenue and they pay $100B in TIPS interest (Assume only 10 Million have invested in TIPS) and inflation is at 3%. Official Inflation raises to 5%. Now TIPS payment is $180B (already putting a hole on deficits). Government prints more to cover the deficit. People are now scared of Inflation. Since most Americans are morons and follow your advice, they all rush to buy TIPS. From 10 Million to 20 Million people. Now TIPS payment balloons to $360B (36% of Tax Revenue). Inflation now is at 10%. TIPS payment is now $720B (72% of Tax Revenue). More people (40 Million) rush to buy TIPS. TIPS payment is $1440B. Now do you see everyone rushing to buy TIPS fucks up government, which prints more fastening the death of the currency and triggers hyperinflation?

Wheaties4brkfst

I think that if everyone flocks to TIPS, the price of TIPS will go up. Obviously. We just had the biggest inflation crisis in decades a couple of years ago and bitcoin crashed. Not sure how im the moron here lmfao.

qroshan

Only if you are a moron who think Governments will deflate currency in a crisis and also honor TIPS (as in the official inflation rate may not be the real one). Also, what do you think will happen when during Hyperinflation, a) Everyone flocks to TIPS b) Everyone flocks to BTC

Wheaties4brkfst

We already have that man they’re called TIPS.

D74248

Vanguard has also just introduced them. Perhaps now the Church of Bogle will not brand bond ladders as heretical! I have used the Blockrock versions for years, holding several through to liquidation. So far, they have done exactly what they were supposed to do. And while I have not used them yet, the TIPS versions intrigue me.

rice_not_wheat

1-3 years is short term, not long term. There's nothing that gold does that TIPS don't do better.

Etherius

A) rate hikes don’t necessarily stop a bull market, and to the extent that they DO, it’s almost always the right call anyway. Bull markets cannot last forever and you shouldn’t want them to. B) I wouldn’t worry too much about Warsh raising rates capriciously or recklessly. If anything I’d be concerned about the opposite- Trump doesn’t like high rates and would not appoint someone who would do so without cause. C) high interest rate environments are great times to lock in good yields on I-bonds and TIPS. You don’t want everything In equities no matter what you think you want. And lastly D) sideways or down markets are distressing to look at short term, but in the long run they provide excellent times to consolidate and research your next buy(s). Investing isn’t about worrying. If you worry over everything you’re gonna get killed and not be able to sleep while you’re getting killed. Investing isn’t about know what to do when the market shifts trajectory.

Krasmaniandevil

Personally, I wouldn't prioritize the mortgage if I were in your shoes. I would probably make a few intergenerational wealth moves, keep a cash cushion, and invest any remainder in whatever your portfolio needs more exposure to (e.g., healthcare equities, TIPS, Ibonds, etc.) Bear in mind that part of 529 can be rolled over into IRA if unused, and can also be reassigned to someone else if you have a second kid. Current administration created a new account named after POTUS that essentially acts as an IRA for children without requiring them to have any earned income. This might be a better vehicle for setting your newborn up depending on the returns on a college education in 18 or so years. A bit of a seed in a UGMA will provide your child with some flexibility in case they want to sell assets without incurring IRA penalties. You might want to look into the gift tax rules and benefits of the account to see if you can get away with just using the annual gift tax limit. Childcare is ridiculously expensive, so factor that into your budget if you haven't already. Depending on your healthcare situation, unexpected medical expenses related to childbirth or aggressively responding to your child's disability/disorder/etc. can be significant, so I would suggest keeping most of the windfall in something safe and relatively liquid (HYSA, Money market fund, short term bonds, etc.). Also, consider whether your business can benefit from a capital injection, as those returns might dwarf anything you could get from the stock market if you're ready to expand or invest in efficiencies. Relatedly, consider whether you have any deferred maintenance for your home that you can get out of the way early. Best of luck!

hugh2018

I said nothing about drawing income from bonds and that isn't the way my plan works even by the wildest interpretation. The guaranteed floor of social security and annuity isn't lying about being guaranteed. It's guaranteed. The TIPS ETF ladder is also guaranteed (and inflation adjusted). The remainder of my income, on which I don't have to rely to keep the lights on, has to come from whatever asset or combination of assets are holding up well at the time of withdrawal, just like any other person, including you, who has money invested in the market on any level. There are several issues with your comments. First, VTIP and the TIPS ETF ladder are inflation protected by definition, so that hedge is built in to my plan and your analysis of my plan's inflation resilience is way off the mark. VT also combines with those two elements to create a comprehensive inflation defense. The VTIP and TIPS provide a direct, mathematically guaranteed adjustment to unexpected short-term spikes in consumer prices, and the global equity exposure of VT acts as a long-term growth engine capable of outpacing persistent inflation over decades. As you know, I'm weighing the impact of reducing the inflation protection a bit by moving VTIP to a MYGA, but the risk is muted, as the MYGA returns are going to beat most inflation regimes anyway. Second, diversity is not an issue in a growth engine that has VT as its foundation. It literally owns a market-cap-weighted slice of over 10,000 corporate entities operating across both developed and emerging markets in the US and abroad. It's an absolute model of broad diversity. Your portfolio, in contrast, suffers from severe sector and structural concentration, leaving it highly vulnerable to specific economic shocks. By crowding capital into niche closed-end funds, actively managed credit instruments, and derivative-heavy overlay strategies, this mix completely lacks the true global diversification found in a total market index. Third, you're displaying a fundamental misunderstanding of total return versus yield extraction. High-yield dividend funds and derivative-based income strategies do not generate wealth out of thin air; rather, they strip equity value from the underlying assets to distribute it as cash, or they take on highly concentrated credit and structural risks. Over long investment horizons, this creates a profound drag on total return compared to a total market index fund.

Exciting-Patient2365

Honestly if you’re talking multi decade, the boring answer is usually the right one. Global diversification, not just US: total world index, some small cap value, some non US, some real assets like REITs or commodities, plus cash/TIPS for dry powder. If you’re worried about a crash, instead of trying to time it, just lower your equity % and maybe tilt more to value and international which are way less AI frothy. Gold can be a small slice if it helps you sleep, but I’d treat it as insurance, not The Plan. The dot com chart is scary but remember a lot of those names literally died. Now the index is way more profitable and diversified. Adjust risk, do a written asset allocation you can actually stick to, then stop watching CNBC.

VanDenH

**Treasury Inflation-Protected Securities (TIPS)**

Ok_Review_3792

BRB buying TIPS

Fast-Reply6409

While we're crying in the casino, TIPS bros are feasting.

VeryStableGenius

TIPS are paying almost 2.8% over inflation. (yeah, I know, taxed on the whole amount)

ekemp

Qualified yes... a certain amount of inflation is "priced in" to the TIPS. If actual inflation is higher than expected, you win. If it's less than expected, the T-bills are better.

Suspicious-Fish7281

I went with total world market funds. I seek to own all the stocks and not just the 500 biggest US stocks provided by the S&P500. Most of my retirement money is with Fidelity, so specifically FZROX (US) and FZILX (International) in my tax advantaged accounts and FSKAX and FTIHX in my taxable brokerage. Bonds. I hold a bond fund FXNAX now because I am about 3 to 7 years out from retirement and want additional stability. I also want a different asset bucket to sell from in my withdrawal phase in retirement. Bonds historically have a better return than cash and better stability than stocks. Bonds also are mostly negatively correlated with the market. When the market goes down bonds tend to go up (we didn't see this in 08'). That said I am still only 20% bonds and likely won't increase that much. If you are further away from retirement than me then run less to no bonds. If you are risk adverse than run some bonds. I believe that is about all the diversity that you need. Small 1 or 2% hedge with precious metals is fine I guess. Reits are probably okay if you rent but if you own your home you probably already are overexposed to real estate. TIPS have their place as an additional safe income replacement for early retirement. Want to take 1 or 2% of your net worth a pick a single stock or 2 go ahead, have some fun. Don't over complicate it. Professional teams paid millions fail to beat the market by picking. I am not better than them and neither are you. Buy low expense total market funds consistently from a young age and in tax advantaged accounts when possible. Add bonds as your age and risk tolerance changes. It will be boring and slow but you will get there. See r/personalfinance and r/Bogleheads for more information.

Yottahz

TIPS, or just the tip.

Yottahz

Honestly I was eying the 30 year TIPS at near 3% real the other week.

Huge-Description3228

15 put spreads on QQQ dated for Jun27 15 put spreads on NVDA dated for March 27 10 naked $250 strike puts on Goog dated March 27 The rest is in TIPS and SONIA benchmarked short duration MM funds. In a market sell-off lead recession, cash is king.

skilliard7

Who said you need to sit fully in cash? There's plenty of undervalued opportunities right now. REITs, long term government TIPS bonds, some value plays, etc. You aren't "Sitting on the sidelines" just because you choose to omit GOOG from your portfolio. People here act like I "lost" because I didn't hold onto Google the past year while it went up 2x, when I made 10x on SK Hynix/Samsung/WDC/Sandisk...

Accidental-Genius

Everything else *that survives* Hyperinflation will kill a lot of companies. It won’t kill Google. There’s an argument to be made that parking cash in Google is a safer place than parking it in TIPS.

Nice-Truck8806

i don't see how this is unique to TIPS... plenty of bonds trade above par. the coupon plus the premium/discount relative to par is what creates the overall yield. and in some ways buying bonds above par with high coupons makes taxes easier.

HistoricalDetail1731

This 5 year TIPS purchase was my one and only Treasury purchase. I understood the basic concept behind TIPS, but did not appreciate that when I wanted to buy TIPS for 100k my bank account would be debited 102k. I have not seen material that clearly explains this pricing / buying issue.

Here4Snow

I'm still confused. Did you not know how TIPS work, especially when compared to regular Treasury Bills, notes and bonds? You didn't really lose anything.  I really like investopedia articles, maybe this will help you: https://www.investopedia.com/terms/t/tips.asp

HistoricalDetail1731

Yes, Treasury Direct has disbursed approximately $2,100 per year so I’m definitely above water on this TIPS buy. That said, I was still disappointed that I “lost” $2k at the very outset. It seems that an individual takes on some risk buying Treasury’s in a noncompetitive auction given that you may need to pay a premium. If I buy something valued at 100k, I don’t want to pay 102k. I don’t think your link addressed the premium purchase price issue.

ClearValue1994

You haven’t done anything wrong, you just paid a premium at auction which is pretty common in 2022 when inflation protection was in high demand. The $2k loss at the start is just the market pricing in future inflation adjustments that were already expected. The way to think about TIPS is total return not face value, so the coupon payments plus the inflation adjustment to principal is your real return. If inflation came in higher than what was priced in when you bought you’ve actually done fine. The mistake most retail investors make with TIPS is buying them when inflation expectations are already elevated, which is exactly when everyone wants them.”

TrixoftheTrade

That’s what TIPS are for

Huge-Description3228

I'm taking profits and buying Gold, Silver, TIPS and lots and lots of dividends.

Timbo1994

If you are going to buy bonds, do it as part of a strategy based on how short-term and how essential your spending is that you are trying to cover. I have some long-dated inflation-linked bonds (TIPS if in the US) to cover essential bills in the 2040s. If you are investing for the short-term then even more reason to buy bonds. Remember with standard bonds that inflation risk is real, and over long horizons it may even exceed equity risk. I can stomach equities for vacation money - they still have the higher expected return (though my view is that the equity risk premium is much narrower than it has been).

Plane-Salamander2580

Allocating part of your portfolio to bond ETFs, to dividend funds like SCHD/DGRO, to BRK.B are all viable solutions to diversify. Also, if you consider yourself an experienced and educated investor, consider global value ETFs, Singapore blue chip stocks (if available, many high dividend yielding), REITS and TIPS.

PartsSprout

Ok that makes a lot more sense and that is the way to do it IMO. BND, TIPS, and similar long and intermediate bond funds are just abysmal for portfolios over the last decade.

VeryStableGenius

I'm not sure if that, erm, metaphor works the way you imagine. Anyway, TIPS paying inflation plus 2.7% if you wanna be a benchwarmer.

VeryStableGenius

TIPS inside a retirement fund are a pretty safe haven ("winning deal"). Even outside a tax sheltered investment, inflation would have to be much higher to make them a losing deal.

creemeeseason

Utilities are traditionally viewed as bond proxies. You get a decent dividend and a steady stock. The 10 year yield going up is a direct competitor to those stocks. Why take market risk for a 3-4% divvy when you can get 4.5% from the government, or 3-4% in TIPS? Also, market is pretty risk on right now which is bad for utility stocks that are considered low risk. Just a hunch.

ATPsynthase12

You don’t need a financial advisor at all. They are just middle men who harvest 1-3% of your portfolio per year and often either lose you money (via outright losses or sub par performance) or go full big brain moves to beat the S&P 500 and again end up losing your money. Or, they intentionally do stupid things to make more money off of you such as putting money on a corporate bond fund. Pull your money out and transfer it to a fidelity brokerage SPAXX account. Once the cash has settled invest it in the following; 50% VTI (vanguard total stock market index), 30% VXUS (vanguard total non US stock market), and 20% in BND. If you are not retiring soon or want more growth, do 70% VTI, 30% VXUS. Although, at your age, there is a strong argument to include bonds or TIPS to ensure you have less volatility and cash on hand if needed. That’s it. Contribute monthly, reinvest the dividends and let the compound interest grow. DO NOT TOUCH IT until you hit the amount you can draw 4% per year without depleting your accounts. Once you hit that point you can retire and are fully financially independent. Check out the wiki on r/bogleheads if you want more info.

BobbyBucherBabineaux

CDs and TIPS

Timbo1994

The interesting question is equities vs TIPS/other inflation linked bonds. If other bonds crash it might just be that the currency is devaluing. TIPS are a bit more powerful.

BottleMedium881

Longer-term TIPS are definitely more exposed to interest rate moves. The inflation adjustment protects principal against CPI over time, but the ETF price can still fall if real yields rise. Short-term TIPS like VTIP are less volatile because duration is lower. So longer TIPS may outperform if real yields fall, but they can hurt more if rates keep rising.

VeryStableGenius

> longer term treasuries will lock that higher yield in for longer but who knows when or at what yield that happpens. Long term TIPS will also appreciate spectacularly if there is a recession and another round of QE to bring down mortgage rates and corporate long term borrowing costs.

KissmySPAC

TIPS but if bad things happen, the gov will bulk.

GrandRare1634

Username checks out. I think my confusion mostly comes from the ETF being more of a bundle of TIPs that are constantly rotating out, as opposed to one I bought direct from the government. Does a higher yield equate to higher dividend/distribution payouts, at least for TIPS?

Ancient-Swordfish292

Based on them saying real yields not consistently seen since before 2008, I think they're talking about TIPS yields, which are real.

Atlas-Scrubbed

TIPS in Roth accounts are fine.

FrankDrebinOnReddit

A lot of things can happen in a corrupt administration, involving TIPS, nominal Treasuries, your stock holdings, your personal freedom, etc. That's always a risk in investing (or just living).

Fiveby21

My concern with TIPS is that... could not a corrupt administration "fudge the numbers" and offer inflation adjustments that are lower than actual inflation?

Griffisbored

TIPS are based of CPI and the new fed chair has already publicly questioned the methodology for calculating inflation. CPI is already lagging behind real world inflation as it is, could get a lot worse if they start tweaking calculations to justify lowering interest rates.

zachmoe

The risk in Bonds is interest rates going up. Assuming interest rates follow inflation up, that means the value of your TIPS will get smashed. I prefer FRNs.

prestodigitarium

I just mean that with TIPS, you're taxed on the inflation adjustment portion, so you're losing money in real/inflation adjusted terms if the fixed interest portion doesn't make up for it. For a while, that fixed interest portion was basically zero, but looks like it's higher now for the 30 yr at least, so it's not a guaranteed loss, depending on what happens.

ATPsynthase12

Bonds are good at protecting already earned assets. It’s why they recommend some form of Glidepath with any investing account as you get up in age because nothing sucks more than losing a few years of retirement income in one swing of the market. Bonds are also good with reducing drawdowns and volatility in an active growth portfolio however it does hamper growth to a degree. Generally I recommend people hold a percentage of bonds in their portfolio at first or at least until they assess their tolerance to drawdowns then scale up/down as needed. There really isnt an alternative to TIPS/bonds, as even gold has to deal with its own commoditized market fluctuations.

youngishgeezer

What about TIPS?

1UpUrBum

Gold doesn't like rising interest rates. Wait for a 50-60% retracement then have a look. XAU-USD $3600-3200 (US gold) Copper will have wild fluctuations. No convexity unless you time options. Holding is a concave money eater. You shouldn't mess around with that stuff unless you know how to handle it. Short term bonds T-bills, TIPS.

FrankDrebinOnReddit

It could of course change, but not because of this. The Fed uses Core PCE, while the TIPS adjustment uses CPI-U. The *Treasury* could change that, but not the Fed.

Hummin2k

The new fed chair has been pushing to change the way inflation is calculated. Is there any chance this could end up factoring into TIPS?

FrankDrebinOnReddit

TIPS exist if you specifically want inflation-adjusted bonds. Otherwise it's equities and their associated risk. Keep in mind that sovereign funds operate under a very different assumption from most retail investors: their time horizon is unlimited, with liabilities due all throughout. For a retail investor, equities are still the way to go for long time horizons.

Zaros262

That's what Treasury Inflation Protected Securities (TIPS) are

Mother-Grapefruit-45

youre right that the real rate you can calculate from TIPS or headline minus nominal is an idealization. the market implied real rate and the actual purchasing power erosion people experience are two different numbers. the part thats underappreciated is that treasury supply is also a factor. the deficit is running 2 trillion a year and foreign buyers are pulling back. china sold 53 billion in treasuries last year. japan has been a net seller. so yields are rising partly because theres just more supply hitting a shrinking buyer base. thats not the same as saying inflation expectations are rising faster than yields. its saying the term premium is expanding because the marginal buyer of 30 year paper wants more compensation for duration risk in a world where the issuer keeps printing.

VeryStableGenius

I prefer to see it as "2.5% returned over inflation for 20 years" (TIPS) So bonds have a 'real P/E' of 1/0.025=40, while NASDAQ has a TTM P/E of about 37, so the equity risk premium is gone. However, this assumes some means of avoiding taxes on the full inflation-inclusive bond interest.

technojoe99

TIPS is a rip off, because it only protects you from the inflation the government is willing to acknowledge, and all of the government's metrics drastically understate inflation.

zachmoe

I would argue TIPS would do okay in deflation, because they cannot adjust below par.

stoplossftw

you can re-invest the interest paid in higher risk assets of your choice while your initial capital is inflation protected so you have to factor that aspect as well when counting the value of TIPS point was TIPS offers downside protection for initial capital

TradeXClub

You’re right that real rates are the mechanism. But there’s a tension worth examining. The gold selloff makes sense mechanically — rising nominal yields + sticky inflation = rising real rates = higher opportunity cost for zero-yield assets. Classic. TIPS-implied real rates moving up forces gold lower regardless of CPI prints. But here’s what doesn’t fully add up: The 114-dollar single-day drop with silver collapsing from 88 to 75.89 is not just “real rates repricing.” That’s liquidation behavior. Someone large was forced out, or there was a margin cascade. A clean real-rate repricing doesn’t move silver 14 dollars in days. A few things to watch: • Warsh’s “regime change” language is the real wildcard. If he signals the Fed will redefine how it measures inflation (trimming shelter, changing PCE weights), markets don’t know what the reaction function is anymore. Uncertainty of that kind historically supports gold, not crushes it. The selloff may be premature. • Hormuz staying closed means energy inflation is structural, not cyclical. The bond market can price it, but if WTI stays elevated and wholesale gasoline stays up 15%+ month over month, the “real rates win” trade has a ceiling — because eventually nominal inflation outruns the yield move again. • The Boeing/Nvidia outcome from the Trump-Xi summit tells you the trade architecture is still fractured. Huawei Ascend blocking the H200 deal is not resolved. That’s a supply-side inflation input the bond market hasn’t fully priced yet. • Silver’s drop is interesting — silver has industrial demand (solar, EVs, semiconductors). If silver collapses harder than gold, it’s pricing a growth slowdown, not just real rate repricing. That’s a different signal. Stagflation fear, not just inflation fear. The honest summary: Gold is caught, yes. But a one-day 114-dollar move with silver down 14 points smells like a positioning flush, not a clean macro verdict. The real-rates trade wins until Hormuz opens or Warsh’s new inflation measurement framework turns out to be more dovish than feared.

GAV17

The 1y projected inflation is below that number, that's why you can buy 1y TIPS at positive rates. If you think the market is wrong about CPI numbers, just buy those.

stoplossftw

yes, TIPS and chill!

stoplossftw

yes, The Bank via TIPS!

stoplossftw

in a way,yes but treasury bills yields are fixed once bought Treasury Inflation-Protected Securities (TIPS) are specifically designed for inflation defense

stoplossftw

so leveraged TIPS ETF? 🤔

I_love_data1111

TIPS enjoyer when he realizes not all things Inflate on same scale.

james_12monkeys_fyi

The honest answer to "fully insulated from an AI unwind" is nothing — index concentration means a Mag-7 drawdown drags everything for a quarter or two (the top comment is right on that). But "insulated from AI" and "keeps up with inflation in a stagflation path" are two different questions, and the second has better answers. What tends to hold real value when inflation is supply-driven (energy, food, materials) rather than demand-driven: commodity-linked producers and real assets — energy, fertilizer/ag inputs, shipping and hard infrastructure — because their revenue reprices with the inflation instead of being discounted by it. That's the actual mechanism: long-duration tech is priced off a discount rate that rises in stagflation; a barrel of oil or a ton of potash isn't. Short-duration TIPS and T-bills (someone mentioned bills) protect purchasing power but won't compound — they're a parking spot, not a growing hedge. The catch nobody likes: real-asset trades are cyclical and volatile, and they only work while the inflation impulse persists — if oil rolls over and it turns into a plain recession instead of stagflation, they get hit too. So it's less "find the one safe asset" and more "which regime are you actually positioning for" — an AI-bubble-burst-into-disinflation and a supply-shock stagflation want almost opposite portfolios.

StatisticianNo4044

I disagree regarding TIPS in general, which have proven in the field to perform poorly in inflationary times (e.g. 2022). Short term TIPS might be relatively ok.

Piyushhdangii

Usually some mix of commodities, energy, gold, TIPS, and international exposure gets mentioned for inflation/geopolitical hedging. The exact percentage matters less than avoiding being too concentrated in one country or asset class.

hugh2018

You mentioned you don’t consider your plan to sit in cash to wait for a crash to be market timing. It absolutely is. Your plan is to stay out of the market and return exactly when? At the right time, of course. That’s market timing by definition. If concentration is your concern, you still have tons of options. Sidelining all your money because of concentration concerns is a head in the sand choice that pretends the S&P is the only way to invest. There are so many ways to deal with your concern constructively. SCHD focuses on fundamentally sound, dividend-paying companies with financial health screens. Because of its formula, it naturally has almost zero exposure to non-dividend or low-dividend mega-cap tech like Nvidia or Amazon. It forces a portfolio into boring, cash-flowing sectors like Financials, Healthcare, Consumer Staples, and Industrials—the exact opposite of an AI bubble. RSP holds the exact same 500 companies as SPY or VOO, but it gives every single company an equal 0.2% slice. Tech drops from a dominant 30%+ of the index down to just its mathematically equal share. It historically outperforms market-cap weighting during periods when market concentration unwinds. And there’s VXUS. European, Japanese, and emerging markets don’t have the same mega-cap tech dominance as the US. International indexes are far more heavily weighted toward financials, industrials, and materials. It’s an instant macro-diversifier away from Silicon Valley. Valuations are far more favorable internationally than in the US. International diversification is a robust hedge against US scenarios like the lost decade. The list goes on. If you’re hell bent on staying on the sidelines, SGOV is great for matching the Fed rate, but it doesn't have an explicit inflation tracker built-in. Short-term TIPS are mathematically indexed to the CPI. You can go with VTIP. If inflation spikes again due to geopolitical energy shocks or anything else, the principal adjusts upward to guarantee purchasing power is protected, with zero stock market risk.

skilliard7

I think it was higher at like 5.17% for like a few hours, but that's about it. For 30 year TIPS, its the highest since 2007.

No_Feeling920

Just look at TIPS yields over the last decade and compare it to ordinary bonds. It's a scam.

Certain_Actuator6870

thank you so much, for a risk averse investor would it be correct to say hold the Market portfolio with Beta = 1, and a combination of the asset classes you mentioned (TIPS + commodities) in a proportion depending on how risk averse you are?

BottleMedium881

I’d frame it less as “add one magic hedge” and more as adding assets that behave differently when inflation or geopolitical stress hits. For inflation, TIPS, short-duration bonds, commodities, energy/infrastructure equities, and some real estate exposure make sense. For geopolitical shocks, gold and high-quality government bonds are the classic diversifiers. For a balanced portfolio, I’d explain it as maybe 5-10% gold, 5-15% commodities/real assets, and a meaningful bond allocation tilted toward short duration or inflation-linked bonds. The exact proportion depends on risk tolerance, but the point is not maximizing returns, it’s reducing sensitivity to one macro outcome.

skilliard7

30 year TIPS provide adjustments based on inflation and yield over 2.8% right now.

skilliard7

30 year TIPS give over 2.8% AFTER inflation right now. So they are pricing in 2.3% inflation relative to the regular 30 year treasury.

skilliard7

That's what TIPS do. Their principal and interest payments are tied to the CPI rate published by the BLS. Right now you can get 2.8% yield + inflation adjustments with 30 year TIPS.

Scedasticity1

It doesn't work like that. All existing debt would continue to pay the same coupons, independent of market yields. TIPS would float along with inflation and newly issued debt would be much more expensive, but old debt would be unaffected.

ImportantCommentator

TIPS

Amazing_Candidate976

I’m surprised at the amount of people saying SP500/index/total market based on your question with SAFEST being the first word and SOLID 6%. Equities should be out of the question (idc if they are low volatility dividend stocks) if there’s a 15% market correction the chances of your dividend stock not going down with the market are low. If you are in fixed income and hold to maturity you are guaranteed your principal (par value) and you’ll get the coupon interest payments. Only answer I saw make sense was the 75% treasuries one with selling puts. Although I’d rather go 100% and sell calls just for my brain. I think definitively you want to be looking at treasuries, municipal, or corporate bonds. Treasuries won’t get you to the 6% you’ll have to do something extra (like option), but you won’t lose the principal (ASSUMING YOU BUY THE ACTUAL TREASURY NOT AN ETF). The higher the yield on a corporate the riskier the investment, but also look at ratings, A, AA, BBB, etc. stay away from “junk” bonds. But, not every broker offers bonds sooooo sometimes you just gotta deal with the cons of the ETFS. If you go down the treasuries, municipal bonds path you’ll have tax advantages too. I would look into TIPS (Treasury Inflation Protected Securities) too. They are a more complicated instrument with some unfortunate tax implications unless you use a tax-advantaged account, but they can outpace normal treasuries depending on inflation numbers and you must hold to maturity to reap that benefit. Lastly, just know that owning the actual bill, note, bond and buying the ETF are not apples to apples. You have no control over what your exit price will be since these funds have no maturity like the actual instruments they hold. You are not guaranteed a par value back.

walt128

I wish I understood how the fuck TIPS work

deepserket

The humble TIPS 👉👈🥺