TIPS

Prudent-Corgi3793

TIPS is indexed to the CPI, not asset price inflation. Even before there were concerns about political pressure on the BLS, it's abundantly clear that there were glaring flaws with CPI as an indicator of inflation. Outside of televisions and whatever else we substitute within the "basket of goods", essentially nothing has been going up at 2-3%. Gold is up 8.42% p.a. since we ended its convertability. Silver is up 5.96% p.a. Housing price index, about 5% p.a. since data became available in 1975. This tracks with the increase in M2 money supply at 6.03% p.a. since we have data from 1980. I'm not opposed to bonds in theory. But I'm opposed to them when they are not paying a sane rate. The "don't time the market" Boglehead style 60/40 investment would have you believe the market had it priced in when you could get like 0.5% on a US10Y or less than 1% on a US30Y in 2020. That's as insane as buying the stock market at triple digit PEs.

15pH

If you truly believe that buying bonds when rates are below 8-10% will "guarantee a loss to inflation," then you should be loaded up on TIPS to profit from this inflationpocolypse you portend.

bob49877

I sold all my bond funds when interest rates started going up. I have ladders now with individual bonds, mostly CDs and TIPS.

TreGet234

Yeah the duration risk is real. (Though does go in your favour if yields fall in a major recession) I don't trust the manipulated inflation data but TIPS do behave better as a fund diversifier imo. At least they don't blow your port if rates get hiked due to inflation.

PashasMom

Affording to put 40% of your IRA in bonds is probably not where you are, financially, if this is your only retirement income. If you already have a solid pension, sure. Otherwise, I wouldn't choose 40% in bonds especially since your risk tolerance is moderate to high. Do you have a solid cash emergency fund in a HYSA? If not, you want to work on that as well. Aim for maybe 18 months of expenses in a HYSA or money market fund by the time you retire. This can be your safety and stability. If you don't want all the volatility that goes with 100% equity, I would do no more than 20% in bonds (preferably 10%). Short term TIPS are great for stabilizing a portfolio while adding some value along the way. Here's a comparison showing VOO + 40%, 20%, and 10% short term TIPS: [https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=65E14U5G2zSvZDQBqEYhkp](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=65E14U5G2zSvZDQBqEYhkp) Personally I would want to diversify into more than just large US companies. While large US companies have done great over the past fifteen years, there is no guarantee they will outperform in the next fifteen or thirty years. International funds have outperformed since early 2025. Small cap value funds also can add a lot to your eventual ending balance -- but they can also be extremely volatile, underperforming for years, making things look terrible, only to absolutely shoot up on the occasional year. You have to be extremely patient with them and not mind the ups and downs. If you think you might be interested in using something like international funds or small cap value funds, let me know and I can do some backtested portfolios for you. But if you aren't comfortable with international funds or with the crazy ride of small cap value, that is fine and you should stick with what you are comfortable with.

chriberg

>30 year TIPs have the breakeven inflation rate at 2.2%. Wrong. 30 year TIPS rate is currently at 3.01%.

No-Math-5868

My portfolio, not including 529 money or home equity is fairly large, to the point where it is over 60X my annual expenses and over 22X my annual income which is pretty high to begin with. So it's not difficult task to build out a 10 year TIPS ladder which would be about 16% of my current portfolio. However, I need to average 3.4% assuming no more contributions until the first date I would even consider retiring to get the so called number I was looking for, which would bring that TIPS ladder to about 12% of my portfolio. I know I didn't answer your question yet, but I figured I would provide some background. I've been investing since my mother introduced me to IRAs (before there were Roth IRAs) when I 16, had working papers and she matched what I put into a CD up to the then limit of 2K (I put in 1K and she put in 1K). I've been a disciplined investor for decades... never panicked or changing my investing strategy. Up until about 2-3 years ago, I as 98.5%+ in equities with the rest in short term cash. I've been slowly transitioning to some fixed income to where I'm at 10% of which 25% of that is my TIPS ladder. My goal is to ultimately get to 20% fixed income. My equity portion is probably around 90% VOO, with a little bit of QQQ, ACN stock since I used to work there, and few other play ETFs like VXUS. I invested in VOO for over 30 years before VOO even existed as and ETF and there was a just a mutual fund. I've been auto investing twice a week the entire time never stopping. When I got pay raises, or other things, I increased the amounts (this was in addition to retirement accounts and 529 accounts). I guess you can say, I was FIRE before the caveman and VOO and chill before VOO was born.

dies_irae-dies_illa

Yeah, i bought some 30 year bonds and TIPS this week, we’ll see what happens. 🔥

skilliard7

3% after inflation yield on 30 year TIPS is pretty solid when you consider that the CAPE yield on US equities is like 2.5%.

RealMcGonzo

I'm retired so I have a nice chunk in Treasury Inflation Protected Securities (TIPS). Check them out. You can buy TIPS and most (all?) types of Ts from many brokers - you don't need to wait for an auction.

Ok_Scientist_2762

Yes, but purchasing and holding individual bonds to maturity also increases interaction. The issuer may also default, with variable risk, based on the issuer. You are also locking in a certain rate, unless we are discussing TIPS.

marima33

Currently a pretty good time to buy TIPS. Look at the ETF symbol IBIG ( iShares iBonds Oct 2030 Term TIPS ETF) or for Oct 2029 Term symbol IBIF.

D74248

Not if they are TIPS and held to maturity.

D74248

Laddered TIPS is one.

bob49877

Value and dividend etfs, not just S&P for me, plus fixed income ladders of TIPS and CDs. 

StealthWanderer_2516

TIPS?

Yottahz

$4,000,000 in a Roth invested in 30 year TIPS at 3% real makes $500 a day with no tax and no inflation erosion.

SmileyFaxe

If you can weather a 50% drop in stocks followed by a very slow recovery of 10 years - you can go all in stocks. I am not that wealthy and cannot - so I include bonds in my portfolio. And half my bonds are TIPS for inflation protection (can be had on the secondary market right now for an incredible 3% REAL YTM).

No-Math-5868

You’ve cherry picked a time period to fit your narrative. Imagine retiring in 1999 at age 62 and see how the first 13 years of retirement would be. I strongly agree that bond funds are nothing like owning individual bonds. Build a proper bond ladder and lose nothing. I’m in the process of building out my 10 year TIPS ladder to cover over 100% of expenses for the first 10 years of retirement until I plan on taking social security. Basically as bulletproof as one can get I suppose. There is no set percentage allocation. My ladder will be less than 20% of my portfolio. First mistake in retirement planning is looking at portfolio balance or income versus looking at expenses.

15pH

>if you are able to survive a few years without depleting your retirement savings, isn't it better to stay with a majority equities The baseline assumption is that retirees are RETIRED and live off retirement savings. If someone has an income stream outside their savings to keep them afloat, then yeah they don't need bonds, or any savings at all! The core concept you might be missing is sequence of returns risk (SORR). Go read that and it might clarify things. Another note is that BND is a horrible bond fund to ballast an equity portfolio. BND has a ton of corporate bonds, which fail at the same time a market is tanking. SGOV is a fine place to stick money for a few years cushion to fight SORR, but short TIPS are generally better because they address the specific mechanism of short term failure.

D74248

Your perspective is right -- the "feels" are bad. We are just, IMO, more at the 1973 point of the train wreck rather than the 1978 point. FYI, the U.S. Strategic Petroleum Reserve is now at its lowest point since 1983. I wonder why.... And since this is an investing sub, one of the results of that 1970s train wreck were TIPS. Buy in a retirement account because of the phantom income tax thing, buy the actual bonds [or defined maturity ETFs] rather than funds, and hold to maturity. That would have worked well 1973 - 1983.

Yottahz

When you get up to like 2 million you start doing dumb stuff like eyeing the 30 year TIPS which are at 3.02% real rate today because you think maybe inflation adjusted $60,000 a year for the rest of your life might be a good way to not work.

GreedyNovel

I don't think it will have the impacts many people expect/fear. Remember that you can invest in basically anything you want whenever you want. But it can impact how well certain investments perform vs. others. For example, 30-year US Treasuries would probably do very poorly, but 1 year Treasuries or TIPS could do much better. The stocks of companies with high asset turnover (grocery stores, for example) should do fine. Companies with long term capital assets financed with long term debt will be okay too. You just wouldn't want to invest in something that involves holding money for a long time at a fixed return. The value of your fixed rate pension would crater. So would the value of Social Security.

Kaa_The_Snake

I have about 30k, so about 5%, in TIPS and IBonds, adding about $1300/ mo in my 401k to TIPS (the other 1/2 to s&p for growth). This inflation is a real pain. I also have another 30k in JAAA , a tiny portion in JEPI, but the majority is all in VT and SCHD

Gandalf__the__Great

have you considered TIPS?

BrennerBaseTunnel

What I can't understand is how the breakeven rate for 10 year TIPS bonds 2.3%. Who believes that inflation will run less than 2.3%? Won't the government keep printing money to repay the debt?

Zealousideal-Bug-944

Agreed. Market timing is nearly impossible. Gain preservation can certainly result in lost opportunity. Yet as a retiree I chose at this venture to merge more into TIPS (and bonds eventually since there will be a rate hike next FED meeting). Still keeping the growth funds and equities that have great numbers i.e. BRKB and KO.

Zealousideal-Bug-944

Absolutely not selling. More of my query is to create opinions, thoughts, etc. I am diversified international ETF, TIPS, BRKB, SGOV, FDGRX, AMZN, VXUS, KO to name a few.

cantthinkofuzername

Nobody’s going to mention a TIPs ladder here? Ok I will: They are a very good buy right now. This would only be for liability matching in retirement (not for accumulation). I have a small ladder that will get me to social security. Have a very small amount in a bond fund (through a 2070 target date fund I am using as an essentially permanent for me 90/10 allocation that will distribute exactly what I need to compliment my TIPS ladder until social security). The rest is in TBIL, ibonds, and VT. I was hesitant to add even this small allocation to a bond fund but I want full diversification and have a 30-40 year life expectancy left and am willing to bet a recession type event will occur during that time and the bond fund will helpful. I could be wrong but I sleep well at night with my set up.

AntiqueProfessor5134

If you're looking for the safest option to hedge against inflation that'd likely be TIPS. Keep in mind the return directly scales with inflation, so if (US) inflation isn't very high the returns will be bad.

CornerOne238

TIPS, real-estate, commodities, gold. Pick one.

InvestInTwinkies

This wouldn’t be the advice I’d give to someone else, but for me personally I’d probably go VT/BNDW/SGOV/PHYS in 50/20/20/10 Someone else I’d tell them it should be in 100% SGOV + maybe a TIPS etf and to simply put aside more than they think they’ll need. The advice to someone else would depend on what the money’s for. If it money for a downpayment on a house then you could probably get away with simply adjusting your timeline or just putting a smaller downpayment down. Situational, but yea that’s roughly what I’d do

D74248

> ....or Bonds. But a lot of people do it unfortunately. Inflation is going to eat you alive long term. I am about to buy the 7/2034 TIPS. Yield 2.3% *plus the principle is adjusted for inflation every 6 months*. The inflation adjustments compound, and the yield is applied to the inflation adjusted value.

garoodah

I would tell you to work with someone to buy the actual bonds. A good starting point is either TIPS or Municipal bonds for your state though.

OwnMap1050

With the massive volatility over the last week, I've been looking closely at Fed funds futures and the 2y10y spread to see what the bond market is actually pricing in for H2 2026. Right now, the real rates implied by TIPS breakevens are showing a significant divergence from equity multiples, especially for heavily-weighted growth portfolios. If the Fed's rate path diverges from current market pricing (which is currently aggressively pricing in cuts), we could see a severe duration shock in equities. I found a really good, data-heavy breakdown on this that goes into the specific multiples: [https://algo-finance.com/stock-market/macroeconomics/fed-rate-path-2026-bond-market-implications/](https://algo-finance.com/stock-market/macroeconomics/fed-rate-path-2026-bond-market-implications/) Is anyone here actively hedging duration risk right now, or y'all riding out the volatility?

Responsible-Milk-259

10yr TIPS at near on 2.5% so you’ve got an inflation hedge with a yield rather than one that comes with a cost to store/insure. Gold needs to see negative real rates before it can go parabolic.

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.