TIPS

Firm_Instruction_775

First decide what your goals are for your investment and what feels comfortable to you. Maybe that’s VOO, SCHD, a combo or something else. DCA in. As another commenter said, it might be worth it for you to have a conversation with an advisor. At 65, you don’t need to be aggressive if you’re not comfortable with that. If you’re just looking for higher yields maybe TIPS or CD ladder is better for you. Spend sometime putting together your plan. It is going to be OK. You missed some gains, you didn’t gamble your money away. It not going to hurt you substantially.

Bubbly-Town-7010

I suppose knowing the whole story would give me a better picture. I see from other comments your between jobs. If you have large expenses, such as children, I could see the reasoning. Even then I think the total portfolio amount would give a better idea. For example, if you have 10k cash in a 20k portfolio, that would make sense. However, 100k in cash in a 200k portfolio I think is almost a dangerous amount of cash sitting around. Look how fast the dollar has lost value the last 5-6 years. 100k in 2020 is now worth about 150k today. Even Warren buffet with his cash pile holds his money via mostly short term treasuries. There’s also TIPS or (treasury inflation-protected securities) that can guarantee yield that beats inflation. I understand you’re worried about risk and uncertainty but it’s not like cash just sitting there is without risk.

TreGet234

I genuinely rather hold gold due to inflation and debasement. Though 5% yield with the prospect of further rate cuts boosting the bond by another easy 10+% is very alluring. But (long regular) bonds are a bet against inflation. Been thinking TIPS bonds but inflation is super prices in with those.

ziggy029

It largely also depends on how heavily you need to lean into your retirement portfolio for income. If you need 4-5% a year, yeah, you need some caution but also need to take enough risk to generate sufficient returns to avoid depletion and avoid getting mauled by inflation. A bond tent (I like a TIPS ladder for this) for the first few years of retirement plus 70-80% equities for the more distant years is what I tend to like here. If you are taking only 1% of it for retirement income, realistically you can be as aggressive or as cautious as you feel comfortable.

therealjerseytom

When you're depending on your investments for income, you need to draw from them consistently at any time. You can of course do this with any asset class, but if you're entirely in any one of them you have no options and may be forced to unload positions when they're oversold during some inevitable downturn. That can hurt your future finances. So it's quite reasonable to identify different scenarios and how you can hedge against them and not be forced to sell certain positions at an inopportune time. Cash equivalents can hedge a liquidity crisis. Long treasuries can hedge a flight-to-safety scenario. TIPS can be part of protecting against stagflation. Global equities cover the cyclical nature of US and ex-US markets. Managed futures can add an asset class with low correlation to both stocks and bonds. Precious metals and commodities can have a place. The more bases you cover, the more bulletproof you are in weathering whatever storm comes. With that said, there are scenarios where someone can be *less* conservative later in life, depending on portfolio size, passive income streams (pensions, social security, rental property), etc. Like if someone's expenses are covered by passive income, they can have an investment portfolio geared for long-term growth to leave to heirs or charitable causes. Or if your portfolio size is very large relative to your expenses, the effects of market downturns might be negligible and you could just ride it out.

Prestigious-Tiger697

Most people just aren’t exposed to it so it’s a big mystery. I didn’t really know much about it until my late 20’s when I got a technical support job at a company that made software for the financial industry. We went through a financial “boot camp” and learned about the difference between fixed income vs equities, the SEC and some common rules, mortgage backed securities, omnibus trades, asset classes, TIPS, currency FX rates, arbitrage trading, etc. I think they should have that class in high school

watch-nerd

I have a crap ton of TIPS and they're up like morning wood.

D74248

> Except the NASDAQ is more volatile, on the long run you make a better return The NASDAQ took 15 years to recover from the dotcom bubble. 17 years on an inflation adjusted basis. Consider that from the perspective from someone who was 35 in 2000. For them, the NASDAQ did not beat a simple TIPS bond until they were in their mid 50s -- a point where they would be starting to restructure their portfolio for income during retirement. We talk about market returns using the broad brush of history, but reality is that our individual investing world is much more granular.

Mammoth-Length-9163

TIPS

skymagic

NO TIPS! >!on tax 🥹!<

EveryPassage

You can buy a 20 year TIPS (treasury inflation protected security) Currently they have a real yield (on top of inflation) of about 2.0-2.5%.

PashasMom

I love the idea overall of the target maturity bond funds. I'm a little more comfortable with the iShares iBonds and Invesco BulletShares funds just because they have been around longer and have a wider variety of types of bonds to pick from (TIPS, treasuries, high yield, etc.).

teamyg

Today's 30-year TIPS auction; who would bid if you know BLS been cooking inflation data?

quovest

The history here is a bit more mixed than people think. Lump sum tends to win most of the time, around 65 to 70 percent across long samples. But when valuations get stretched, like when Shiller PE is above 35, DCA starts to look a lot more competitive. To me, the real question is not lump sum versus DCA. It is what your cash is doing while you wait. If you can earn 4.5 to 5 percent in a money market fund or short term Treasuries while you DCA over 6 to 12 months, you are not just sitting on idle cash. You are getting a solid low risk return while you reduce the chance of buying right before a drawdown. The simple framework I like is this. Compare the S&P earnings yield, which is basically 1 divided by the PE, to the risk free rate. When that gap gets tight, the math starts to favor patience. Not market timing. Just a systematic way to deploy capital. I would also keep an eye on inflation expectations through TIPS and on forward earnings. The market is assuming earnings keep growing. If that growth disappoints, that is the main risk you are managing.

D74248

This is just a personal opinion. I would be wary of the TIPS bond fund. TIPS are great, but holding the actual bonds to maturity is different from holding an open-ended TIPS fund. The problem is that TIPS are extremely sensitive to interest rate changes. This is not a problem when holding the bond to maturity (though it will bounce around a lot until it gets there), while holding the fund leaves you constantly exposed to interest rate risk. I suggest considering a bit of a value tilt in the equity holdings and more international. Finally, campaign for a "brokerage window" in that 401k. That is the best way to get to things like TIPS, nominal Treasuries, and fixed income in general since you could then build a ladder and hold them to maturity.

TreGet234

Been looking at bonds trying to figure out if they make sense in any way shape or form short and long term. They do not. The market rate fluctuations if you wanna sell the bond prematurely are so unpredictable that the chance to lose money is fairly high even after holding for years. You could buy and cycle 2-3 year bonds to lock down the interest if rate cuts are expected (long yields are so unpredictable right now, they may rise even when the fed cuts rates unless they ramp up QE). This reduces duration risk but still gives upside if a panic forces sudden rate cuts. Even if rates get hiked (for example due to inflation) you lose out a little bit but not too much. That you can just hedge with an overnight money market fund or hysa. Depends what you think is more likely. Overall i think i prefer the risk profile of longer dated TIPS right now. Longer dated bonds are kinda shit because long yields won't come down without QE or a massive crash. If you expect QE just buy gold instead. If you expect a crash followed by collapsing rates (the ideal fantasy case) then do build a bond position. I feel like TIPS are a weirdly good middle ground.

Ancient-Cookie-9402

If I were 65 and rolling over $1M, I wouldn’t think in terms of “starting from zero.” I’d think in terms of protecting the life this money needs to support At this stage, sequence-of-returns risk matters more than beating the market. A heavy equity bet especially driven by fear about the dollar can backfire if volatility hits early in retirement Personally, I’d want: • A core of high-quality, low-cost broad U.S. exposure • Meaningful allocation to Treasuries or high-grade bonds for stability • Some inflation protection (TIPS or a modest real asset allocation) Not because the U.S. is flawless — but because retirement is about durability, not macro predictions The biggest mistake I see people make at 65 isn’t being too conservative. It’s reacting to fear and overcorrecting Control is important. Just make sure the structure matches the stage of life you’re in

Xafniko

If I were 65 with a $1M rollover and aiming conservative, I’d think less about ‘beating the market’ and more about protecting purchasing power + steady income. Something simple like: * \~40–50% high-quality global equity ETF (broad diversification outside just the U.S.) * \~30–40% short/intermediate-term bonds or Treasuries for stability and income * \~10–15% inflation hedges (TIPS, commodities, maybe a small gold allocation) * Keep 1–2 years of expenses in cash equivalents so you’re never forced to sell in a downturn The key at that stage isn’t chasing returns — it’s building a portfolio that can pay you reliably while surviving inflation, currency swings, and market volatility.

HomeBarista

Inflation, unfavorable taxation (QDI is capital gains, not marginal tax rate), marginal value of additional returns (e.g. for estate planning, lifestyle, etc.), and probably ongoing high income. Fun fact to consider: the S&P 500 has never paid less than 1% in dividends yearly throughout its existence (usually much more) in addition to appreciating handsomely. And it somewhat adjusts for inflation. 1% on $20M is $200,000 gross, or close to $170k after federal taxes (capital gains, assuming this is the only income and all QDI). Still, with that kind of money, it's probably better to consider portfolios with significant derisking components for various scenarios and black swan events. Probably something including stocks, real estate, TIPS, gold, etc. and with strong geographic diversification.

Ancient-Swordfish292

I'd do a TIPS ladder at that point.

D74248

This sub has a depressingly narrow view of investing. Serious money does not just look at the S&P 500 over the past 15 years, they have a broader view and don't want to be inconvenienced by the next 2008, 2000, 1987, 1968, 1937, 1929....... The bond market is larger than the stock market, which is something to keep in mind when reading these replies. People who "have enough", and I don't mean big money, put money into Treasuries all the time, but not the 30 year. They build bond ladders, often with TIPS.

caprividog

Love it when Nancy Davis was asked what's the right move, and she says, "Just the TIPS."

bladeomatic

The classic 3 fund/etf blend is fine for most who want to set it and forget it (S&P, International, Bonds). This gives you diversification and levers you can lower or raise as conditions change. Remember, that \~30% of all stock value is outside the US, so don't short change your allocations ex-US, just b/c of the past run ups in S&P. Plus the dollar woes are also helped with Intl investments. Me, I'm a geek and search out the \*best\* funds and holdings vs. just rubber-stamping the low fee/mediocre returns that Vanguard is offering. I'm in my 60's and have a 45/45/10 blend (was 70/25/5 a few years ago). Recent moves have been to slowly shift some large growth towards large value with dividends, and reduce some tech holdings. For instance, less MSFT and AMZN, and more T and UL. I'm also adding more diversity within my bonds (TIPS, Corporates, Munis, Intl, Emerging, Treasuries), and making sure my powder (cash) is dry in a Quontic Money Market account and some T-Bills. The market has had bright spots, but it's wobbly. Tariffs being levied and then rescinded via the whimsy/spite of one unpredictable man continues to be a flashing red sign of caution. There's also a lot of froth re AI that \*may\* turn into earnings, but certainly feels like the tech bubble of 2001. Who knows if there will be some small corrections or large dips coming in 2026, but the Warren Buffets of the world who are building war chests of cash, may have some buying opportunities of fantastic companies at discounted pricing.

Kanolie

Ya but no one is saying to invest in dollars. If you want strategies to have a stable long term value there are already easy ways to do that like TIPS.

dritu_

If you buy a short term TIPS at a fair real yield and hold to maturity, they would beat CPI, definitionally. If buying and holding for 1 or 2 years, I'm not sure there's that much point to targeting TIPS over traditional treasuries. The risks are when: * you don't hold to maturity * you buy a TIPS fund instead of individual TIPS, which are subject to price volatility * CPI doesn't reflect real inflation * opportunity cost: traditional treasuries outperform if CPI comes in lower than expected https://www.schwab.com/learn/story/tips-and-inflation-what-to-know-now

EveryPassage

Why would they fail to beat inflation over the short term if you buy a TIPS maturing in 2 years with a real rate?

dritu_

TIPS are intended for long term holding. They can fail to beat inflation over short time horizons.

D74248

>Do you have any bond exposure? The fixed income is split is between three silos. One is a bond ladder that runs through 2034, using a mix of defined maturity corporate bond ETFs, nominal Treasuries and, towards the end, TIPS. This will cover our withdraws during that period. Our planning includes a bond tent, and this ladder winding down will be the machinery to make that happen. Second is a sleeve given to Schwab/Wasmer Schroeder to manage. That was fairly recent, but so far they are doing OK with it. Third is what I call "greed corner" (my wife prefers "cash generators"). A modest allocation to preferred stocks and Closed End Funds (CEF). Small enough that if it blows up our world does not end, but large enough to generate income that takes some pressure off the rest of the portfolio. >...the guys I used to seek guidance from have mostly aged out. They’re still rich, have just been watching them make late age mistakes and think they should hang it up. We talk about investing risks, but cognitive decline gets ignored. And it is indeed the elephant in the room. I plan to give it over to professional management by age 75. It is not about dementia, is just losing the edge as we age, and financial management seems to be one of the first things to fade. >Guys get so focused on never paying taxes.... It is a mistake to look at a portfolio's value and not mentally subtract the taxes, but it seems to be a mistake that most people make. Then they become irrational/angry when having to deal with them. I have spent time in countries with low and even no taxes -- and with just a few exceptions they are miserable places to live. So, I pay my taxes and I don't bitch about it.

WhyKeepBuyingSlop

I’ve kept a pretty strict portfolio for a few years that ive rebalanced around: US Equity International Equity Core Bonds T-Bills / Cash Equivalents Inflation Protection (TIPS) High risk (crypto single investments) Rebalance based on market conditions throughout the year.

Dal-Thrax

Depends. The original 1929 crash was about 30%. If that happens, the sun rises and we continue on. The problem was that the original crash caused a meltdown of the system that had been circulating gold around the world. That caused the US currency to melt up (deflation) and a number of banks to fail. The follow on lead to stocks being down about 85%. Full recovery if the index did not happen until the 1950s (though actual recovery might have been earlier, IBM hit itself kicked out of the DOW for a number of reasons, including selling early databasing systems to the Nazis to round up Jews). If Great Depression round 2 happens the only thing that does not die is sovereign bonds and even some of those sovereigns might not be around at the end of it. In this situation gold is not a certain safe haven. During the depression the price of gold DROPPED when the US went off the gold standard, as the US was providing price supports. Nothing does well. Paid off house and investment in TIPS might cause the least day to day disruption (though TIPs in the depression would have suffered major losses due to deflation). That said there were some Germans who had their currency crash, there homes burned out, then the Soviets take anything that was left. At that point the question becomes who in the family died, not how the investments did.

EveryPassage

TIPS are exactly that.... And you don't always lose out to inflation with short duration bonds. For the past couple of years they have exceeded inflation.

EveryPassage

I'd go with VBIL (lower fee version of SGOV) for short duration. Cheap and flexible. IBIE is also a decent option, October 2028 TIPS (inflation linked bonds).

Feldii

If you truly want a safe haven TIPS is good. You’re guaranteed inflation plus a bit extra. It’s not going to make you rich though.

TrenVantage

TIPS

Delicious-Plastic-44

I would buy TIPS for the amount you need from this sleeve each year. If permanent position I would invest in both short term TIPS etf and Treasury etf. Assuming us investor.

BuffersAndBeta

The only truly risk free rate is the SOFR to 30 day t-bills (and similar instruments), don't believe / accept anyone who tells you otherwise. However, like you pointed out, the 10 year is actually "as close to risk free as possible" on a NOMINAL basis. Developed countries usually pay their obligations even if it leads to inflation internally. If you need something for _nominal_ returns, I think the 10 year is perfectly fine to compare your portfolio to. Just not real returns. In the US, you have TIPS which could serve as a benchmark - but I'm one of those people who thinks TIPS are useful but cynical about the calculations they use. IMO, a better option _might_ actually be the "All Weather Portfolio" - or more generally - a basket of various asset classes around the globe.

Timbo1994

I am young and in the UK but have put 10% in long-dated index-linked government bonds (equivalent of TIPS)

HammyMugats

The most amazing thing in the world would be Powell to announce on his way out that he is switching his entire portfolio into 5 year TIPS.

Imaginary_Disk7227

Not an expert, but TIPS is a great way to secure wealth in this time, but it's on USD so 🥴

Inevitable_Pin7755

Hard to hedge every macro scenario cleanly, especially when a lot of this is already priced in. Dollar weakness does not automatically mean bonds or oil collapse, it depends on growth vs inflation vs policy response. Historically people spread risk rather than rotate everything. Some combo of short duration treasuries, TIPS, non US equities, and boring cash equivalents tends to survive most regimes. Energy can still hold up if inflation sticks, even with a softer dollar. If you are already heavy tech and crypto, the bigger risk might be overreacting to a single narrative. Diversifying slowly usually beats trying to time the macro pivot.

MrMoogie

Yeah I’m considering TIPS but the yield is shitty and going down in the short term. If it’s looking like rates have bottomed I may buy some. Agreed about REITS, choose wisely but they will continue to pay, if you choose something with a long enough average lease. O would be perfect as a 10% allocation. SCHD is probably a good bet, a quality ETF. One of the ETF’s focussed on FCF (COWZ etc) and VGK. I’m also holding plenty of SGOV, JAAA, a bit of PCN, some emerging market government bonds. If tariffs are bazookered, taxes will need to go up and I’m hoping inflation will be DoA. We can all dream.

giraloco

Finally someone here is saying something useful. I'm afraid REITs may crash with high interest rates so make sure they don't have too much leverage and are the one that will survive the apocalypse. Stocks that produce essential products and services and have solid balance sheets are the most likely to preserve value and strive after competitors fail. Buying gold now seems crazy. It's pure speculation that will reverse to the mean. I buy short term bonds including international treasuries from developed countries. Also TIPS. I also bought a place to live, just in case.

eyeap

TIPS sounds better than each of those

eyeap

So, where are you putting money? TIPS?

InarasMal

Imagine buying TIPS bonds to keep up with inflation lol, lmao even

jarMburger

TIPS also subject to interest rate risk as well. They’re good for unexpected inflation risk (as defined by CPI) but their price will go down if interest rate rises.

mattcannon2

Unless they are CPI-linked TIPS

EvolvingDior

Depends on the maturity of those debts and how much is in TIPS.

Extension-Temporary4

bonds, bond funds, TIPS, USFR. Depending on risk tolerance, some high yield  funds like jepq, JEPI, sphy . . . Get an advisor. But a fixed income bond ladder is probably your safest bet — it won’t generate 5% but it will get you part of the way there. Mix in some dividends and diversity, you have a decent upside with a known/limited downside. 

hiphopanonomos

TIPS max profits would require the gov to tell the truth about inflation

pmotiveforce

It's hilarious bulls rant about money printer and US equities. Your best case scenario seems to be matching or slightly beating inflation in that scenario. Uhh. Congrats? I guess? Maybe just buy TIPS though you boomer ass?

escapefromelba

Personally, don’t love how overweight SP500 has become with tech sector particularly given really only handful of companies driving it.  I don’t think it’s diversified enough plus you lose out on some great companies simply because they aren’t U.S. based and international has been significantly undervalued for awhile now.  I have SP500 plus extended market for mid and small caps as well as a total international index fund.  So effectively total world but at different ratio (plus bond/TIPS fund).

favsep

Major revolution by fascists -> Long or short megacorps (depends if fascists or winning or losing), long precious metals, short anything the fascists are against. If losing, liquidate everything you have with the domestic bank and transfer cash converted to Swiss franc or metals to foreign banks in safe havens. Long stablecoins (stablecoins will have a premium vs. domestic currency). Major revolution by semi-fascists -> Long megacorps, long precious metals, short anything the fascists are against (e.g., ESG) Major revolution by moderates (unlikely given moderates don't give enough shit to start a revolution) -> long/short based on your discretion, don't long precious metals Major revolution by environmentalists -> Long precious metals, short oil/gas, short bonds, buy TIPS, long ESG stocks Major revolution by semi-communists -> Long precious metals, short bonds, buy TIPS, start transferring cash to banks in Swiss/Dubai/Singapore/Luxembourg. Long real-estate only IF the semi-commies say they will give 100yr leases. Long stablecoins (stablecoins will have a premium vs. domestic currency) Major revolution by communists -> Short everything except precious metals (if possible). Short any company that have assets in the US and is publicly listed on foreign exchanges. Stockpile cigs & drugs as it will be used as de-facto bribery currency. Transfer cash converted to Swiss franc or metals to foreign banks in safe havens. Long stablecoins (stablecoins will have a premium vs. domestic currency) WWIII (No nuclear warheads used) -> Long US equities (esp military industry), short non-US companies. WWIII (Nuclear war) -> Its joever Large protests against ICE -> Depends entirely on Trump's reaction

Thistlemanizzle

So were precious gemstones, however the diamond industry has seen massive downward pricing pressure from artificial diamonds, so now a lot of jewelry that was kept around in part because it could be resold is worth 10-20% of what it was. I imagine Gold will have some staying power, but I would feel safer with financial instruments like TIPS.

Cool_Giraffe6495

Let's give the audience the full picture... There are Bills, Notes, Bonds, TIPS, and FRNs. Here are the dates for the upcoming auctions: [Upcoming Auctions — TreasuryDirect](https://www.treasurydirect.gov/auctions/upcoming/)

GrandRare1634

Based solely on my understanding of it, I've been looking at parking longer term funds in TIPS - even if there's inflation, they should provide protection, and if lenders demand higher yields, they should benefit as well? Fully aware I might be totally wrong about this, but that's my hope from what I've read about them.

EveryPassage

Wouldn't even need the S&P500 at that point, just invest in 20 TIPS and you are set.

TWSTrader

**Spent a decade on the buy-side here.** The "Foreigners are Dumping Treasuries" headline is the oldest scare story in the bond market. We see it every cycle. Before you rotate into International Bonds (BNDX), you need to understand the mechanics of *why* you hold bonds and what BNDX actually does. **1. The "Dumping" Fallacy** When China or Japan "dumps" Treasuries, they aren't doing it because they think the US is going broke. They are doing it to **defend their own currency.** * *The Mechanic:* They sell Treasuries (USD) to buy their own currency (Yen/Yuan) to prop it up. * *The Result:* Yields might spike temporarily, but the US Bond market is the deepest, most liquid pool of collateral on Earth. When yields spike, US domestic institutions (Pensions, Insurance co's) step in to lock in the higher rates. It self-corrects. **2. The BNDX Trap (The "Hedge" Cost)** You asked about BNDX. * **The Problem:** Vanguard's BNDX is **Currency Hedged** back to the USD. * *Why this matters:* You are buying European or Japanese bonds (which often yield *less* than US Treasuries) and then paying a fee to hedge the currency exposure away. * *The Math:* You end up with a portfolio that behaves very similarly to US bonds but often with lower yield. You aren't getting the "Dollar Crash" protection you think you are. **3. The Real Risk: Duration, not Geography** If you are worried about US fiscal dominance (debt issues), the risk isn't that the government defaults. The risk is that they **inflate** the debt away. * *The Liability:* Long-duration bonds (20+ years) get crushed by inflation. * *The Fix:* You don't need to go International; you just need to shorten your duration. * **VGIT** (Intermediate) is the sweet spot (5-7 years). * **TIPS** (which you already own) are the *direct* hedge against the fiscal irresponsibility you are worried about. **My Take:** Don't overcomplicate the fixed income side. Foreign bonds (especially hedged ones) often just add correlation without adding alpha. Stick to your US Treasury/Muni mix. If you are truly paranoid about the US debt spiral, the answer is **Gold** or **Short-Term Bills (SGOV)**, not German Bunds.

FrankDrebinOnReddit

I haven't decided whether corporate bonds will be part of my mix yet (if so, it would be in fund form, not individual bonds), but certainly a combination of short and intermediate duration. Short duration bonds (t-bills) don't have much if any interest rate risk. You might receive less income from them if rates drop, but as ballast that you sell when needed, their prices don't respond to rates much since they mature so quickly. Intermediate-duration bonds do carry modest interest rate risk, but they're often but not always anticorrelated with equities during an equity drawdown. When equities drop, there's a decent chance that interest rate drops will follow, which increases bond prices. These could be nominals or 5Y/10Y TIPS. I think I'm too risk-averse to go beyond 10Y bonds.

nutbuckers

> One does not simply cut the U.S out of the world economy. Let's just watch the 10 Year TIPS, would be funny if it gets cozy around 2.5%... been edging there for a while :--)

moiax

I've come to the same conclusion. Build up some bonds, but build a 10 year I-Bonds&TIPS ladder. If I do 30%, than those bonds equal a 3% withdraw that is inflation protected. Depending on rates at the time, I may do regular treasuries. The equity will continue to grow and hopefully be enough to reduce SoRR.

EvolvingDior

Just remember, if they lie about inflation, they don't have to pay as much interest on the TIPS they sold.

TotalDebt5868

I’m halfway through The Intelligent Investor as well, and Zweig’s 2024 commentary is great. I think Graham’s core ideas—margin of safety, Mr. Market, and disciplined rebalancing—still hold. What’s changed is which tools you use for defense given today’s rate/inflation backdrop. * Bonds are portfolio ballast: they reduce volatility and help you avoid selling stocks at lows when you need cash. Correlation with equities rose during the inflation/hiking phase, but if rates fall, longer-duration bonds benefit more; short-duration (T-bills/short-term ETFs) track current yields with less price risk. * Money market vs bonds isn’t either/or: money markets offer high liquidity and decent current yields, but their payout drops when rates fall; bonds may appreciate in that scenario. Choose based on whether you want steady, liquid yield or rate sensitivity for potential capital gains. * If you’re young and risk-tolerant, you don’t need a heavy bond allocation, but rules-based rebalancing matters. Instead of fixating on a strict 60/40, build a “equities + fixed income” framework and rebalance annually or at thresholds to avoid emotional swings. * A simplified mix: broad equity ETFs plus a tiered fixed income sleeve (e.g., T-bills/ultra-short ETFs for cash management; a modest slice of intermediate/long duration for rate-cut exposure; local munis if tax-advantaged). If you prefer “bond-like” income, pipelines/quality REITs can be a small allocation, but remember they’re still equities. * Reading: One Up On Wall Street and Common Stocks and Uncommon Profits pair nicely with Graham—Lynch helps you find businesses you understand; Fisher strengthens qualitative growth analysis. Use Graham’s framework to anchor position sizing and behavior. My takeaway: since your gains likely came from the bull run, do a light, rules-based rebalance—shift some profits into “short-duration cash-like + a bit of bonds,” keep your offense in broad equities/quality names, and set a rebalancing trigger (say ±5% from target). BRK can be a core equity, but it isn’t a hedge. Hold cash for needs within the next 1–2 years. More concrete tiers: * 3–6 months expenses: money market/T-bills (high liquidity) * Midterm reserve: short bonds/CDs/TIPS (depending on inflation view) * Defensive hedge: a small slice of intermediate/long Treasuries or bond ETFs * Growth engine: broad equity ETFs or high-quality stocks (including BRK) Write down your target mix and rebalancing rule, then follow it—less noise, more consistency.

blueberrypancake234

You can open a Roth. Do you have a Roth? You can invest in iBonds on Treasury Direct or TIPS. You can start putting money into the S&P500, but know that the market could suffer a large correction in the near future, so you have to be able to emotionally weather that. And it only makes sense if you plan to put money in every year so you can take advantage of dollar cost averaging.

Confident-Court2171

TIPS are bonds. Protected by devaluing currency. I don’t think you know what you’re buying.

desi_cucky

No. Bonds are mostly useless. I invest in TIPS to withhold cash for opportunities or in general for long term budgeting.

Easik

Well, STRIPS are way simpler from a tax and income planning perspective. You know exactly what you are getting and when you are getting it. If you have a huge bucket of money in other accounts for retirement/fun, then I would aim for STRIPS instead of trying to maximize your return with TIPS. Especially if your STRIPS ladder covers all essential/unexpected expenses and it lets you spend your retirement however you feel like it.

Easik

Without knowing the rest of the portfolio, risk, financial situation, age, etc, it's pretty hard to give advice. I think the question is really, do you think inflation will go up or stay the same in the future and this gives you your answer. I vote that inflation will be higher in the future and throughout the duration of the treasury, so I would go for TIPS to retain buying power.

sanyasea

Imagine thinking TIPS or index linked gilts protect you from inflation.

Timbo1994

I am in the UK and have 10% of my portfolio in inflation-linked gilts here (equivalent of TIPS). I am a little addicted to them - I think they're a great concept as an asset and quite a lot lower risk than cash/other bonds.

Swirl_On_Top

So, what inflation hedge y'all doing? - US stocks - International Stocks - Real Estate - Precious medals - Cryptocurrency - Commodities - TIPS Any others?

tinydisaster

His chair ends in May. His governor seat with voting rights goes in January of 2028. Lower rates do not simply equate to line goes up. They can redefine inflation and choose to ignore the dual mandate. This pisses off bond holders who own 38T of our debt, as inflation eats away their yield and the TIPS system breaks down. Miran said this in an interview on Bloomberg if you’d like to hear their plan. They can open up lines of credit with the fed in an emergency basis. There is a lot that a compliant fed can do that is dangerous when it’s not politically independent. Our currency is often stated as having exorbitant privileges because of our independence and credibility.

gravescd

Treasuries have a constant coupon rate regardless of inflation, except for TIPS. They are cash flow and their price is based substantially on the NPV of that cash flow. Gold is a universal intermediary among currencies with almost no intrinsic value. Its price is supply/demand and vibes. These are entirely different assets and have different functions in a portfolio. OP wants to replace Treasuries due to uncertainty in the dollar, so it doesn't make sense to suggest a non-cash flow asset with totally different pricing dynamics. There are plenty of bonds out there not tied to USD liquidity.

zachmoe

>Fixed income investing is difficult even for pros.  Agreed, which is why I recommended Floating Rate Notes, the risk in Bonds, besides inflation which is a given even with TIPS, is interest rates going up.

EhGrillGuy

Thanks for making it so obvious, there TIPS.

Important-Advance767

By the time you’re 40, if you contribute $5k/mo and make no additional gains, the total portfolio value will be $2.4M. $60K/$2.4M = 2.5%. You need a 2.5% annual gain to never work another day in your life once you’re 40 (without accounting for tax and inflation). An 80-20 (bond-stock) split would be plenty here, with a good chunk of bonds in TIPS. Not financial advice.

er824

When I last checked Schwab's Treasury MMFs were yielding less than SWVXX. I'd save state taxes with SNSXX but the tax savings didn't make up the yield difference. SGOV and USFR are ETFs that invest in ultra short term government bonds. SGOV invests in 0-3 month Treasury Bonds and USFR invests in Floating Rate US Treasuries. There are several other ETFs that invest in ultra short term Gov't bonds that are equivalent. I actually have a bit of SWVXX but most of my uninvested cash is in USFR. I haven't checked recently but when I last checked it was yielding slightly more then SWVXX and is state income tax free. The key is they invest in ultra short term securities so you don't have the same interest rate risk you have when investing in longer term bonds. A Money Market Fund keeps a constant share price of $1, orders execute every night and you get paid interest monthly. A Treasury ETF trades like a stock. It has the same limitations of other ETFs at Schwab, no Fractional shares. USFR's share price hovers around $50 and SGOV around $100 so if your dealing with small amounts of cash that can be a pain. If you look at a price graph you'll see they make a nice sawtooth pattern. That's because they slowly increase in price throughout the month as they accumulate interest then drop when the interest is distributed. All of these are fine options and are easy to switch between. You mentioned iBonds and TIPS. You can only buy iBonds directly at Treasury Direct. You can buy TIPS at Schwab, either directly, via a Mutual Fund (SWRSX), or via numerous ETFs (SCHP, TIP, etc). Schwab has other options for cash as well, T-Bills, CDs, etc.... I dabbled with T-Bills for a bit but it was more effort then it was worth and just started buying the ETFs instead. The convenience was worth the minor cost to me.

Chemical-Fun3692

Interesting! If you are using Schwab, I am on the research tab, under Money Market Funds and I only see the SWVXX under “Prime Money Funds”, where is the USFR and SGOV located? I clicked on ETFs and typed SGOV, and it says it’s an “ultrashort bond”, Does that mean it’s a bond or ETF? Is this like an iBond or TIPS? Do you get a return on these like the Money Market Funds? Is there a reason you prefer to buy the short term treasury ETFs in addition to the SWVXX? I am curious why you don’t choose Government and Trrasury Money Funds like SNVXX, SNOXX, SNSXX, or the money market ETF like SGVT? All of these have a 7 day yield.

Vivid-Link9806

I wish you best of luck, but based on your posture you’re very likely to lose a lot of money. I’d recommend TIPS

jonnycoder4005

800 million in TIPS 100 million SP500 100 million in SGOV - live off this

MrDinglehut

If they're cook'n the books then TIPS are not a hedge against inflation.

ConcentrateOk523

Bad for TIPS bonds. Need to get rid of VTIP, big mistake to buy it.

VerdantPathfinder

50% in world stock fund/etf, 25% in US bond fund, 25% in TIPS bond fund. But I'm hoping to retire in 2-5 years. If I was still in accumulation phase 100% world stock fund/etf.

raisedeyebrow4891

Why TIPS

adrr

Wow that’s negligence. Since this report is used for TIPS bonds, wouldn’t it be a technical default if data is verifiable inaccurate? I own a bunch of TIPS and I am getting screwed.

bank_truth

The 80s rates came with 12-14% inflation. Your coworker probably left that part out. Real return was basically zero after inflation ate into everything. Right now the Fed just cut rates and they're likely to keep cutting. CD rates will probably keep dropping from here. You can check our website if you want to see what's available now, but don't expect them to climb back up anytime soon. If you want something low risk that outpaces inflation slightly, you might look into TIPS or I-Bonds. They adjust with inflation so your purchasing power stays intact.

theWesternReserve

Anyone got any HOT TIPS on a SURE THING

remmy623

Sorry not sure what you mean by an amount of time to break even. A TIPS ETF will be buying new TIPS bonds as the old one mature so there's not really a "time frame" on it from your side - it could go on forever. You can look at TIPS break-even rates to see what inflation needs to average in order for TIPS to outperform nominal bonds. Basically is nominal bonds yields vs TIPS real yield. https://fred.stlouisfed.org/series/T5YIE

remmy623

Holding direct TIPS can create some headaches for retail investors because there's federal tax on both the small fixed coupon payment AND annual changes in principal even before maturity. This is because the coupon is fixed and the reflection of inflation happens via adjustments to the principal. So there are two other options you can use in combo - I-Bonds - very similar to TIPS, can buy via treasurydirect - only offered to retail investors, limited to buying 10k a year. Inflation calc happens via changes in coupon and tax is deferred. So it's a lot cleaner but you're more limited in amount. Also some early redemption penalties. Additional option is a TIPS ETF. Avoids having to manage the unique tax implications - pushes to more just the normal ETF tax implications 

FunnyGeologist7278

My other post was removed before I could see comments. Somebody here mentioned TIPS, which I’m going to look more into.

FunnyGeologist7278

Hmmm I need to get some of these TIPS. Are they okay to hold in a taxable brokerage account?

remmy623

If you're looking to protect against inflation you can always just buy a type of bonds called TIPS to maintain your purchasing power. They also have funds that focus in these. If youre already looking at CDs - you can definitely lock in a 3.5%+ rate for ten years which would be higher than the historical average annual inflation

Kaa_The_Snake

Well I’m close to retirement and am building a cash (TIPS, actually) bridge because I know my luck, the market 100% will crash the day after I retire!

Mefibosheth

There's always TIPS.

skilliard7

TIPS have a 2.6 to 2.7% real yield.

gardenia856

Annuities can be useful to cover a clear needs gap, but they aren’t a no-brainer for most. I’ve seen the permission-to-spend effect too, but you pay for it with lower liquidity, ordinary income taxes, and usually a lower expected return than a simple Treasury/TIPS ladder. The way I’d use them is narrow: figure essential spend minus Social Security/pension; size a plain SPIA or small MYGA to that gap; keep the rest in a basic stock/bond mix and a 5–10 year Treasury/TIPS ladder so you’re not forced to sell in bad markets. Avoid complex riders and long surrender periods, buy from A-rated insurers, keep below state coverage limits, and ladder purchases over a couple of years to manage rate risk. In IRAs, I’d only consider a late-life hedge like a QLAC, not a big allocation. For quotes, I start at Blueprint Income, compare MYGA terms on Fidelity’s platform, and also check Gainbridge when I want a plain fixed rate. Bottom line: buy guarantees only for the gap you must cover, not the whole portfolio.

PolitzaniaKing

Future inflation... The mechanics of how markets signal long-term expectations ## 🏦 How a 30-Year Bond Reflects Inflation Expectations - **Nominal Yield as a Signal** The yield on a 30-year Treasury bond represents the return investors demand for lending money to the U.S. government for three decades. That yield incorporates: - Expected real interest rates (the "true" cost of money). - Expected inflation over the 30-year horizon. - Risk premiums (like uncertainty about future inflation or fiscal stability). - **Real vs. Nominal Bonds** - **Nominal Treasuries**: Their yields rise if investors expect higher inflation, since inflation erodes the purchasing power of fixed coupon payments. - **Treasury Inflation-Protected Securities (TIPS)**: These adjust payouts with inflation. Comparing 30-year nominal yields to 30-year TIPS yields gives the **breakeven inflation rate**—the market’s implied average inflation expectation over 30 years. - **Breakeven Inflation Rate** \[ \text{Breakeven Inflation} = Y_{\text{Nominal 30yr}} - Y_{\text{TIPS 30yr}} \] Example: If the 30-year nominal yield is 4.5% and the 30-year TIPS yield is 2.0%, the breakeven inflation expectation is about 2.5% per year over the next three decades. - **Market Confidence & Anchoring** - If breakevens stay near the Federal Reserve’s target (~2%), it signals confidence that inflation will remain controlled long-term. - If breakevens rise significantly, it suggests investors expect persistent inflationary pressures. - If they fall, it may indicate fears of deflation or very weak growth. --- ## ⚖️ Why It Matters - **Policy Insight**: The Fed watches long-term breakevens to gauge credibility of its inflation target. - **Investor Strategy**: Pension funds, insurers, and individuals use these signals to decide between nominal bonds, TIPS, or other inflation hedges. - **Economic Narrative**: A stable 30-year breakeven suggests markets believe inflation shocks (like energy spikes or supply chain issues) will fade over time. --- 👉 In short: the 30-year bond doesn’t just tell you what investors want today—it’s a window into how markets collectively price inflation risk decades into the future.

D74248

> The people suggesting inflation linked bonds aren't correct. If it's low growth high inflation, chances are sooner or later rates will be hiked and those bonds are going to drop in value regardless of the CPI linking. This is an example of the difference between open ended bond funds that buy sell/sell to maintain a duration and a bond ladder where the bonds are held to maturity. The former is as you describe, but there is no interest rate risk for the latter. And TIPS are easy to buy in a brokerage account.

SpellAccomplished541

Do I-bonds pay more than TIPS? I'm retired and locked some money into a 5.9% single premium deferred annuity, but I wouldn't mind locking a little more into something safe and inflation adjusted.

giraloco

TIPS, cash, short treasuries US and International, stock of solid companies with strong balance sheets, real estate, a 2.5% fixed mortgage if you have it. Avoid expensive assets like gold, no long bonds, no speculative stocks, no discretionary company stocks.