TIPS

notjakers

Used to be nearly 100% SP500. Now I’ve diversified out of it. Foreign equities and large cap value are the bulk, plus a little bit of midcap and some TIPS and foreign bonds. If the market tanks I’m hedged a bit. If the big tech companies continue to dominate, I’ll do well just not as well. The big companies buying Nvidia chips are going to run into a revenue problem eventually. A lot of AI is being commodified, which will drive revenue done and really hit the gross margins. Even if we use AI 100x as much in 10 years, it’s not clear that revenue will rise even 10x.

Status-Selection8848

Solid plan, especially with the diversification. Since you’re so close to retirement, maybe add some TIPS or bonds for stability. Protecting capital matters more than chasing growth at that stage

kronco

Some links with some of the articles around TIPs from about two years ago when I built a TIPS ladder: [https://www.morningstar.com/bonds/high-tips-yields-are-retirees-best-friend](https://www.morningstar.com/bonds/high-tips-yields-are-retirees-best-friend) [https://www.morningstar.com/bonds/its-time-consider-tips](https://www.morningstar.com/bonds/its-time-consider-tips) [https://tipswatch.com/2023/02/05/tips-on-the-secondary-market-things-to-consider](https://tipswatch.com/2023/02/05/tips-on-the-secondary-market-things-to-consider) [https://www.wsj.com/market-data/bonds/tips](https://www.wsj.com/market-data/bonds/tips) [https://www.bogleheads.org/forum/viewtopic.php?t=394380](https://www.bogleheads.org/forum/viewtopic.php?t=394380) [https://www.bogleheads.org/forum/viewtopic.php?t=412123](https://www.bogleheads.org/forum/viewtopic.php?t=412123) [https://www.tipsladder.com](https://www.tipsladder.com) [https://www.bogleheads.org/wiki/Treasury\_Inflation\_Protected\_Security](https://www.bogleheads.org/wiki/Treasury_Inflation_Protected_Security)

JackfruitCrazy51

A few reasons to use a TIPS ladder to bridge the gap to SS. Keep in mind that you would want to do this inside a 401k/traditional IRA for tax purposes. Sequence of returns risk refers to the danger of retiring right before a market downturn. If you have to sell off your investments to cover living expenses while the market is down, you lock in losses and may jeopardize the long-term health of your portfolio. A TIPS ladder provides a "safe" source of cash for the first few years of retirement, allowing your riskier assets (like stocks) to ride out a market downturn without being touched. A CD ladder will achieve a similar effect. With the CD ladder, you're gaining a higher rate but are introducing inflation risk. This free site is a good resource. [https://www.tipsladder.com/](https://www.tipsladder.com/)

JackfruitCrazy51

What about a TIPS ladder for the 6 years before you get social security? Keep the rest invested.

SirMontego

>No it doesn't, go read the bill Ok, I will go read the bill. Thanks for the tip! [Pub. L. 119-21, section 70201, on page 101](https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf#page=101), says: >‘‘(3) CASH TIPS.—For purposes of paragraph (1), the term ‘cash tips’ includes tips received from customers that are paid in cash or **charged** and, in the case of an employee, tips received under any tip-sharing arrangement. WOW, look at that! It says "charged," exactly what I said. Next, we can also "go read" the law to see where that language is codified. [26 USC Section 224(d)(3)](https://uscode.house.gov/view.xhtml?req=(title:26%20section:224%20edition:prelim)) says: >(3) Cash tips >For purposes of paragraph (1), the term "cash tips" includes tips received from customers that are paid in cash or **charged** and, in the case of an employee, tips received under any tip-sharing arrangement. That language is there too! This is such an amazing experience! The funny thing is that I read the bill before writing that comment. [Proof.](https://www.reddit.com/r/OutsideLands/comments/1mlcspv/comment/n8iacb4/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) Meanwhile, you clearly have not read the bill, are spewing out completely wrong information, and obviously can't even follow your own advice. You should delete your comment.

user-namepending

I-Bonds and TIPS are not designed to "make money". They're a hedge against periods of high inflation. Just one more light shield of safety we get against inflation running rampant. Why would this inflation data be fabricated? Just because you don't like the number? Why was everyone okay with last months numbers for PPI because they weren't perfect?

BananaBagholder

So are I-bonds and TIPS worthless now? If the regime just fabricates inflation data, sounds like we don't have inflation protection.

skilliard7

I was mostly in 30 year TIPS but I sold them today to get money market. The market is pricing in a September rate cut as an absolute certainty, even pricing in a 12% chance of a 50 basis point cut, but I think September 12 inflation numbers will be bad. It's not even just tariffs creating inflation concern, the crackdown on immigrant labor is going to push costs up.

A1L1V2

I made that bet right after the king was voted in back in November. Sitting on gold miners, TIPS, cutting edge tech, and blue chip dividends. Up close to 40% since mid November.

wrestlingchampo

If you are concerned, WMT isnt going to the refuge for you my guy. GLD, TIPS and mining companies have been my refuge since about 2 weeks ago. The inflation is coming, with or without Powell's rate cuts.

zxc123zxc123

I've been telling folks for years now that gold truly reflects risk aversion, is county specific hedge, and offers anti-volatility/inflation benefits. But folks years ago were going on about how it was a stupid useless rock and TIPS were paying 7-9%. WSB frontpage often top ticks meme craze or stock momentum because WSB regards pile into things before they crash. It was strange to see folks keep talking about TIPS in the spring/summer/fall of 2022 when in my mind it was likely the speaks of inflation once the Fed started to hike rates. Anyways we see gold going ballistic this year because individual investor but also central bank demand for it. It's just that folks like OP is late to the game. Sure short term cash pays well, but if Trump puts in his own goons and they cut rates to 0%? Sure TIPS protect against inflation, but what if the folks Trump puts into place say 150% "inflation is -1.5% and the economy is great THANK YOU FOR YOUR ATTENTION TO THIS MATTER"? Oh long bonds might protect you from rate cuts with 20/30yr near 5%, but what if Trump's crazy policies undermines faith in the US and spike yields more? Then you're stuck with those bonds for 20-30 years as +10%/yr inflation destroys your dollar value. That assumes Trump doesn't just default for the lulz (that's what a Russian asset would do) while Trump says 150% inflation is 1.5%. Like WTF will do you? Sue Trump only to get deported to El Salvador? LOL. But with gold you worry about none of those. Gold is priced in dollars but price is determined by institutional & central bank demand while supply is capped by the labor/energy/capital costs of finding/mining/refining/transporting gold. In a world where the US, US leadership, US dollar, US debt, and Pax Americana are increasingly called into question (generally the best option btw. Even now. Japanese bonds? Chinese Yuan? European leadership? Russian debt? Pax Austro-Canadia? Nah.), then gold goes back to being the gold standard.

StatisticalMan

I own gold as a percentage of my portfolio because it has low correlation to both stock and bonds. Uncorrelated assets are a good thing. As to when or why or how gold goes up honestly it doesn't matter. The fed cutting rates is also linked to fear. Fear of true fed independence. Without an independent fed the risk of higher future inflation is higher. Without independent agencies to accurately report things like employment and inflation then buying TIPS is buying blindly. Gold however will react to falling dollar buying power. It is the inflation metric that can't (easily) be faked. If the govt officially says inflation is low for the next three years but gold keeps going up 5% to 10% a year consistently during time same time period the market is indicating that inflation is in fact not low.

D74248

> Bonds are a poor investment during inflation During the stagflation of the 1970s rolling short term Treasuries proved to be one of the best strategies — with the benefit of hindsight, of course. And today we also have TIPS, which are designed to outperform inflation when held to maturity (otherwise they have a lot of interest rate risk).

Business-Evening-816

A variation on your Bond notes are TIPS, which has the low-return that you mention for nominal bonds, but you will have protection against inflation. Depending on where people are compared to their retirement horizon, ladders and holding to maturity protects against the value falling in bond funds.

D74248

[Sequence of Returns Risk](https://www.schwab.com/learn/story/timing-matters-understanding-sequence-returns-risk) can really kill a retirement portfolio. I am 5 years into retirement and am using a [bond tent](https://smartasset.com/investing/bond-tent) in an effort to mitigate it. Laddered Treasuries/TIPS and defined maturity corporate bond ETFs. I do not hold open ended bond funds that maintain fixed duration. Currently the portfolio is 40/60, and the plan has it ramping back up to 60/40 by 2032. Younger people look at the spaghetti plots of the various portfolio analyzers and daydream about the lines that launch to the stratosphere. As we near retirement most of us start to think more about avoiding those lines that go off the bottom of the chart (the failures). Wade Pfau, who is well qualified, has written several books about retirement. Just Amazon the name. Also [Michael H. McClung's opus](https://livingoffyourmoney.com/), though for full disclosure I opted for a simpler approach than his ideal model -- but still well worth the read IMO.

Chronotheos

They’re diversified beyond the S&P. They usually carry small cap and international early on and the fade into some bonds and TIPS later. If you held the S&P from 1999 to 2012, you’d have felt like a netard then too.

kewku

A: VIX < 15 → market is very calm. Historically, the lowest was 8.6 in 2006 before the 2008 crisis. The market’s calmness today might make people think a correction is unlikely but one shock (like in April 2025) can spike volatility immediately. B: Investors are betting on currency debasement, meaning the value of the US dollar could fall over time due to money printing (QE), low interest rates, or hidden inflation (“silent tax”). This erodes cash holders’ purchasing power without official tax increases. Central banks are effectively trying to inflate away debt. Which means: 1. If you hold a lot of USD cash, its real value could decrease over time because of inflation and central bank policies. 2. Some investors react by putting money in things that protect against inflation: - Gold or other precious metals - Real assets (property, commodities) - Stocks - Inflation-protected bonds (like TIPS in the US)

Slowmaha

Agreed. But everything is so damn correlated. So the US goes, so everything goes. I’ll probably look at TIPS or high yield corporates

AICHEngineer

Look up "amortized withdrawal rate". 4% would work when you retire in 1966 and use a fixed inflation adjusted rate for 30 yrs. Thats the *worst case scenario* in our last century of US data. Why? Inflation in the 70s. Yes, you can spend a *lot* more during low inflation eras, even without huge market returns. Think about it. 4%? Thats so low. 1/25th of your portfolio in the first year. Assume your investments only high real returns of zero with low vol (match inflation like with TIPS) and you last 25 yrs. 4% assumes inflation is so terrible plus you only get a low real return from stocks. Most most most cases are not *that* bad.

BigEdsHairMayo

Are any of you concerned about TIPS given the chaotic situation with BLS leadership?

BigEdsHairMayo

Getting into TIPS soon for the first time. Tariffs + weaker dollar + rate cuts + deportations = inflation.

kronco

Vanguard target date funds reduce stock exposure over time until 7 years after the target date when they move to the Target Retirement Income Fund (VTINX) allocation for, well, forever. That is 30% stocks and 70% bond allocation at that point. Source: [https://investor.vanguard.com/investment-products/mutual-funds/profile/vtwnx#overview](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtwnx#overview) : *The funds continue to adjust for approximately seven years after that date until their allocations match that of the Target Retirement Income Fund.* And that final fund: [https://investor.vanguard.com/investment-products/mutual-funds/profile/vtinx](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtinx) I assume other firms do something similar. You can select funds different then your retirement year. if you want more stock exposure with the risk/reward that brings go with one after you plan to retire. Want less risk, go with one dated before you plan to retire. it's a common approach. Vanguard funds are good. Their fee for the fund is just that in that it includes all the funds it holds. That is you don't pay the fund fee on top of the fees of the underlying funds. 0.08% in total fees is hard to beat here. Vanguard uses short duration TIPS in their target date funds to manage inflation. Deep dive it here as to why they use short duration: [https://www.bogleheads.org/forum/viewtopic.php?t=443866](https://www.bogleheads.org/forum/viewtopic.php?t=443866)

jarMburger

Fed wasn't independent during the Nixon era. Nixon famously pressured his Fed chairman Arthur Burns to lower rate and enforce a looser monetary policies. So just go back to Nixon administration and see what happened to the market. Keep in mind that couple of major difference between now and then is that there's more investment choices now (TIPS didn't exist for another 20 years) but also lot more Americans own stocks/bonds as well.

Thin_Cat8817

I don't see the need for the bond allocation at your age tbh. If you have some money that you may reasonably need in a short/medium term, TIPS would be fine. But for an account that you're holding longterm it's unnecessary. I would keep any emergency or cash funds in a money market fund and for longterm account just allocate that 15% in bonds into your stocks. I would personally allocate to something like AVUV for some small cap value, but that's just my opinion. You could also do a bit more international if you want, 25% is fairly low. Maybe something like 10% in AVUV (US Small Cap Value) and 5% AVDV (International Small Cap)

VeryStableGenius

> Does anyone have any advice on what to do next? My retirement goal is 2035. Speaking for myself, here are my choices, that I'm gradually working toward: BRK-B - it has consistently beat the market, and keeps 35% in cash (T-bonds) on hand for opportunistic acquisitions. Don't time the market. Let someone smarter and more experienced time the market for you. SCHD - boring dividends, paying almost 4%, but total return of 8.5% *over inflation* for the past decade. P/E of just 18 or so, so the valuation is reasonable. Less likely to get pummeled in a bear market. VYMI - Maybe. International dividends. VTV - and other value funds, P/E 20 or lower, again priced reasonably by historical standards. TIPS (inflation adjusted bonds) - paying 2.6% over inflation. But only in a tax deferred retirement account. This is to hold cash and bet on a future interest rate fall (like another bout of Quantitative Easing). If QE happens, they'll shot up in value. I'm staying away from: hot stocks and index funds, because they are heavy with exactly the get-rich-quick, get-poor-quicker stocks like the ones that OP is cashing in. Alternatively, there are equal-weight index-compisition funds out there that contain homeopathic amounts of TSLA. If the $600K gain is not in a retirement account, it has to be carefully cashed out to avoid tax consequences, checking out [IRS capital gains brackets](https://www.irs.gov/taxtopics/tc409). It will be hard to bail out without paying $90K tax. You could even write calls against your gainer stocks to squeeze out more money and insulate against *some* losses if you pursue an extended sale schedule. Eg, a March 26 in the money call goes for 24, about 13% of NVDA's price. But you have to know what you're doing, and assume the risk of a sharp fall if you dilly-dally in diversifying.

15pH

>) I think it’s likely that the inflation rate will be continuing to rise steadily for the next 12-18 months due to the tariffs beginning to trickle-down to the end consumer Yes, so does every other rational investor. In order to assess whether you think TIPS ETFS will outperform comparable bond ETFS, you need to quantify your beliefs. TIPS ETFs are currently priced with the expectation of growing inflation...roughly 2.8-2.9% depending on the fund and duration etc. That means if inflation grows to "only" 2.7% , you will be correct that inflation will rise but you would still be better off with normal bond funds. I am going to flip a coin 100 times. A thesis of "there will be lots of heads" is not useful or actionable. The market is already priced for there to be 50 heads, so your thesis needs to be whether there will be more or less than 50. If you cannot quantify your expectations, or relate them to what everyone else is expecting, then you cannot use them to invest meaningfully.

Dinkmers

TIPS is right there

Soundadvicefroma

TIPS are at inflation +2.5-3.5% I thought?

bienpaolo

Trying to hedge against all those market curveballs is smart, but sometimes juggling too many bond funds can just make things messier and hardr to track, not safer. FXNAX does have corporate and MBS expsure that can act kinda like stocks when things get shaky, but switching into VGIT and VGLT might leave you expsed to interest rate risk if rates suddenly jump, which could hurt your portfolio just as bad. Plus, TIPS help with inflation but don’t protct against all scenarios. have you thought about how much risk you’re actually willing to stomch if the market tanks, or are you mostly trying to avoid losses at all costs?

kiwimancy

Utilities have the lowest correlation to other stocks, but the highest to bonds, which your portfolio has a lot of. Commodities have lower correlation to both stocks and bonds than utilities do. With that said, "but we still want our diversifiers to have positive future expected returns" is not a bad reason to look within equities sectors for diversification and skip broad basket commodities. It reminds me of 7Twelve's allocation to particular equity sectors, though that uses REITs and natural resources rather than commodities. I notice you lack any allocations to foreign equities, foreign bonds, TIPS, and credit, like All Weather has, as well as the leverage it uses to bring lower risk assets up to target. You've based it on the simpler All Seasons portfolio relayed through self-help-author Tony Robbins, not Dalio/Bridgewater's All Weather hedge fund. (Not that there's anything particularly magic about the real All Weather or real risk parity). 38% equities feels low for a long term portfolio, but seems reasonable for withdrawing after a 10 year horizon. Overall it looks good.

Dstein99

I would rather buy the underlying TIPS than the TIPS etf. The point of buying them is you can guarantee a return net of inflation so it doesn’t make sense to me to have a fund that is constantly buying and selling TIPS and has multiple bonds that are varying rates net of inflation.

D74248

Old guy checking in. Take a hard look at 2000-2015. I took over 10 years for the S&P 500 to recover. 15 years for QQQ. And then real returns for 1969 to 1982. Real returns because inflation ran hot. My personal rule is to always be positioned to comfortably deal with a 40% correction that takes 8 years to recover. And given current market valuations that may be optimistic. If you are concerned about inflation over 10 years then consider TIPS. Buy the actual bonds, hold to maturity.

kenseyx

If long term, and you don't need the money over the next 5 years, go with a mix of bonds, equities, precious metals. I'd cut out the latter and make it simple with 40% bonds 60% equities, see below: Of the 40 keep 5% in SGOV which can serve for shorter term liquidity needs, the other 35 into longer duration inflation protected bonds (TIPS) like the SCHP ETF. For the equities, I'd recommend going internationally diversified. The US had a great run over the last 15 years, but valuations are stretched by most metrics and nothing lasts forever, so having something that tracks MSCI world (i.e. including US but not exclusively US) may be better. You can put a very small percentage into precious metals as an additional hedge for your bond position and generally anti-stagflationary hedge. But a) using TIPS as your primary bond position already protects that position against stagflation and b) gold already had such a run it seems to anticipate lots of bad things to happen, so upside potential seems limited at this point. If you still want to go with it, then maybe 1% into silver and 1% into platinum which still have some room to catch up. You can slide those percentages around any way it fits your risk profile, the safer you want to be, the bigger you make that TIPS percentage. Once you made a decision stick with it, rebalance once a year, don't panic sell your equity position during market crashes. The latter is a guarantee for bad returns.

Old-Cantaloupe-1711

I DO go to Catholic confession to Get STOCK TIPS

elpresidentedeljunta

"The Close"-quote of the day: "I´m sorry, on .,. on the TIPS saying. That, that ... that kinda threw me. So, I mean ... I would assume you may not have that kind of stance on TIPS unless you expected some sort of sustained INCREASE in inflation or at least maintaining of where we are with current inflation levels?"

BobTheBob1982

Just probing to learn What are your thoughts on some of these arguments for utilities? [https://www.optimizedportfolio.com/all-weather-portfolio/#using-utilities-instead-of-commodities-and-reits](https://www.optimizedportfolio.com/all-weather-portfolio/#using-utilities-instead-of-commodities-and-reits) 'Think of owning a commodities fund as just paying for their storage somewhere' 'even in inflationary environments, investors have historically been better off over the long term holding just about anything other than commodities. And we now have assets like REITs, TIPS, etc. as alternatives.' 'Commodities may offer a tiny diversification benefit to lower volatility and risk, but we still want our diversifiers to have *positive future expected returns*' '90% of all people who play the commodities game get burned' 'the Utilities sector has had the lowest correlation to the total stock market of any sector, lower than that of both Commodities and REITs – specifically, 0.38 for Utilities compared to 0.53 for Commodities and 0.59 for REITs' 'Demand for utilities stays relatively constant (it is said to be *noncyclical*), which is a significant reason why utilities perform comparatively well during market downturns.' 'Utilities are the *least explained* by the [known equity factors](https://www.optimizedportfolio.com/factor-investing/) that explain the differences in returns between diversified portfolios' Trying to collect the strongest arguments for and against to get the whole picture

snowdogdb

30 year TIPS goes down, and SPX is also going down? What gives?

I_Own_A_Fedora_AMA

Economic events today that actually matter: 9:45 PMI 1:00 TIPS auction

Darcey_Leigh

I’ve wrestled with the same question, wanting bonds that actually balance out stocks instead of just moving alongside them. Shifting part of your allocation into Treasuries (like VGIT or VGLT) can give you that clearer hedge, while keeping a small slice in TIPS for inflation makes sense. The mix doesn’t have to be perfect; it just needs to give you enough stability so you’ll stay invested when the market gets choppy.

D74248

My personal preference is to use a bond ladder rather than open ended bond funds. As a retail investor it is straightforward to buy Treasuries and hold to maturity, including TIPS. Corporate is harder, but there are defined maturity bond ETFs that function as a rung on a bond ladder.

skilliard7

<5%, mainly just for personal finance reasons IMO long term US treasuries are better hedge for a crash: - If a bad recession occurs, interest rates are going to drop. This will drive bond prices up and amplify the ability to buy the dip. For example, during the 2020 covid crash, while stocks dropped 40%, long term US treasuries were up 20-25%. However, interest rates were already low prior to covid. With today's high rates, if interest rates fall to where they were in 2020, there is 80-90% price upside for long term bonds. Even more for bonds with higher convexity, like zero coupon bonds or TIPS. - If we get a soft landing in which interest rates drop but a recession does not occur, cash is going to be left behind, while bonds and stocks will both rally. - If interest rates climb higher, stocks aren't going to be spared.

A1L1V2

20% sitting in moneymarket funds ready to deploy The rest is deployed into us t-bills / TIPS, precious metals miners, global defense/aerospace, US tech stocks, and international large caps

nop--sled

I am curious what will happen with something like TIPS where about 1/2 of the return is based on the reported CPI. Next 30 year auction is Aug 21st or 22nd?

adrr

If it came out they faked the numbers, it would be a technical default of the TIPS bond. I wonder if credit agencies would downgrade it to junk.

OrangeTheFruit4200

I am a fan of real estate + bonds or TIPS if you expect huge inflation surges. Rest is just for fun unless you can't afford real estate. Then yeah kinda need to gamble until it hits. For currency devaluation scenarios, real estate is usually the one that moons with one caveat: "the country needs to be stable long term". If it's not stable best to hold other currencies and gtfo ASAP haha Sux for future generations though. Probably won't afford a house even if they sold their soul to the devil.

FarrisAT

Any such changes will take place slowly and then suddenly. Typically the lead up is a higher risk premia in the most at risk assets, such as long term TIPS bonds. After all, if you get paid in faked CPI, you get fucked if that CPI is lower than reality.

B_P_G

It's still higher than the Fed's stated 2.0% target. Then again, the spread between treasuries and TIPS is more like 2.4-2.5% these days so I don't think anybody believes takes the Fed's target seriously anymore. The Fed obviously doesn't.

owoxuo

Lol tbh I’ve considered something similar before. The thing is that it depends on what kind of investments you do. You’re basically betting that your investment return on your borrowed funds (minus capital gains) > loan interest. If it’s 1980 and 10 year bond rates are 15%, and your loan is 5% somehow, then sure that works. All other financial instruments will have varying risks, so if the market drops, your original investments + borrowed funds will both go down, and you’re still paying the same interests. SBLOC as you’ve mentioned would be one of many ways to do margin loans / leverage, so it comes with the same risks and benefits. If you’re an extremely high net worth individual, then I’d imagine a small 1% return post-inflation can be quite significant, but it has to be no risk like TIPS (unless government collapses in which case you might have more important things to worry about)

eggmaker

Isn't it the other way around: TIPS is tied to CPI? TIPS uses CPI to compute inflation. If CPI data is skewed or faked then TIPS will be affected.

cafedude

They'd try to sell TIPS and there would be few buyers. Would that stop them? "they can’t do this" hasn't stopped them from doing a lot of questionable things.

GeorgeWashinghton

Moreso, they can’t do this because it would explode the TIPS market.

cafedude

I mean, they weren't supposed to do a lot things they've been doing. I'm not sure if you're saying "I don't want them to do this because it's tied to the TIPS market" or "No they can't do this legally because it's tied to the TIPS market". If the latter, then see other things that they've done that were considered legally questionable.

kiwimancy

You can redeem I-bonds at par+interest after 5 years or with a 3 mo haircut after 1 year. If inflation spikes and CPI is corrupted to stay low, TIPS would fall like nominal bonds, while you can redeem your I-bond and reinvest elsewhere.

giraloco

There are $2T invested in TIPS. It's a given that they will fudge the numbers and steal money from investors. I assume there will be lawsuits and the next Government will have to pay retroactively once the data is cleaned up.

weasler7

I'm not sure any existing survey comes close to BLS data transparency, rigor, and market mechanics (eg CPI data sets TIPS rates). I'm sure smarter people at me are eyeing the data closely and have their own composite data for inflation. I would assume GS is trying to make money so their own data is almost certainly proprietary.

airbud9

Have you considered for the ease of management just using an asset allocation fund, and then having some amount in a money market (sgov is also fine) for an emergency fund? Also for inflation protection there are other ways then buying physical gold, there are silver and gold back ETFs and there are also TIPS (treasury inflation protection securities) for inflation protection.

StatisticalMan

Both TIPS and ibonds use CPI to compute inflation. If CPI is faked then they are equally affected. Nominal treasuries would be an option. The expected (not necessarily actual) real yield on nominal treasuries and TIPS are roughly the same if you believe in a efficient market. The other option would be foreign sovereign debt or very high quality corporate bonds.

InterviewLeast882

I think TIPS are based on the same CPI calculation. IBonds are generally good and you get tax deferral. You could stay with Tbills which will respond to inflation changes with no reliance on government calculations.

Deep-Elk7492

Educate yourself first, 4/6 months delay are not the end of the world, spend 1k/2k of that inheritance to actually acquire the knowledge. It’s easy to say put all in S&p500 or Nasdaq and forget but it’s just not how it works (we are emotional beings). Study, learn to understand what drive returns on the market (risk theory), learn about different asset classes, their characteristics (gold, commodities, dollar, TIPS, Bitcoin, etc.) and than take informed decision.

Far-Enthusiasm-5995

When you park money in Treasuries you’re balancing two main risks: interest‑rate risk and reinvestment risk. Short‑maturity or floating‑rate ETFs like TFLO or SGOV have almost no duration, so they’re very stable and will track the Fed funds rate. That makes them useful as cash equivalents or a place to store "dry powder" because price volatility is minimal. The trade‑off is that if rates fall, the yield on those funds will reset lower almost immediately. At the other end are broad Treasury bond ETFs that hold intermediate or long maturities. They will fluctuate more as yields move, but they lock in today’s yields for longer and historically have provided higher total returns over multi‑year periods. A fund like GOVT holds a mix of maturities; VGIT is intermediate‑term; VGIT or a ladder of maturities can be a good match if you have a 10‑ to 15‑year horizon and want a smoother ride than long bonds. Very long‑duration funds are more sensitive to rates and may not be ideal if you plan to shift the money back into equities on a downturn. Floating‑rate Treasury funds (USFR, TFLO) own short‑term securities whose coupons reset with the 13‑week bill rate. They protect against rising rates but don’t give you the term premium you get from holding longer bonds. TIPS (Treasury inflation‑protected securities) are another option if you’re concerned about inflation, though they come with their own quirks. Rather than trying to predict interest rates, many investors choose a core bond fund that matches their time horizon and complements their equity allocation. In a Roth IRA, you also don’t face taxes on bond interest, so holding a taxable bond fund there can make sense. Ultimately the right choice depends on whether you prioritise stability (short duration), income (intermediate duration), or inflation protection. Talking through your broader asset allocation with a financial planner can help you decide which combination of these instruments fits your goals.

Cash_Flow_Yield

Safeguarding and maintaining wealth is done with TIPS and short term high quality bonds not with Pokemon cards.

haarp1

True. And of couse it is way higher, so foreign TIPS are actually detrimental.

haarp1

Yeah i wouldn't. Maaaybe when the dollar was extra strong compared to Euro, but it's not anymore. A lot of countries don't even have TIPS afaik.

skilliard7

Mostly an interest rate play, when yields come down to where they were 3 years ago I will sell the TIPS for a 50% gain and then buy stocks which will likely be down 20% or more.

skilliard7

Expected return for VOO is 1-2% after inflation based on monte carlo analysis. 2.6% after inflation from TIPS is a lot more favorable.

Heyhayheigh

30 years?? Throw at a dart board with mag 7 and some VOO and you will seem like a genius in 30 years… can’t make this stuff up. Arguing about interest and TIPS and the like is silly over a 30 year time span. Do some real investing. Goodness.

skilliard7

What if I want to invest in 30 year TIPS? There's no ETF for that. The TIPS ETFs I see are all much shorter duration with much lower yields.

fabtasticx

Thank you for responding! I haven't left my hometown. Therefore, I never thought about the possibility of moving in the future to a location that may not have my bank nearby. That is good to know though incase things do change for me. In that aspect, it is a smart choice to go with an outsider for those types of investments. I appreciate the insight! I also thought about a 529 plan when I had my kids a few years back but also realized it would only be redeemable for college. I too didnt want to lock my kids into that, lol. Have you looked into TIPS or a Series I Savings Bond? I read those are protected from inflation as I have been researching other investments. I wasted my time on a CD, so I know not to make that mistake again. It underperformed than the potential it could have been had I put it elsewhere, lol.

fabtasticx

TIPS and a Series I Savings Bond are good long-term investments that are protected against inflation. It's best to wait for it to mature before redeeming. TIPS offers a 5, 10, and 30-year term while the I Bond won't fully mature until the 30-year mark. The I Bond allows you to access it after the first year, but if you redeem it before 5 years, then you will have penalties. A CD will indeed underperform. Even though it's safe, you won't make much off of it like you could with other investments. My CD had a set rate of 4.39%. The return wasn't big enough like I would have liked it to be in totality, so do not make my mistake, lol.

woome

If you still feel that way, and feel like your money is better elsewhere (or in cash) then there shouldn't be any reason to keep them. The only thing you would be losing are the 3 years of maturity you've "earned" on them, but you could say that wasn't worth the price you paid, so far. However, if you have the time, here's a post by Jurrien Timmer that might might give you some more insight: https://www.linkedin.com/pulse/closer-mile-week-8425-jurrien-timmer-snkre/?trackingId=wDNgBk%2B%2BSAqR2D%2F3hUCxSg%3D%3D > The soft jobs data pushed the forward curve back down to 3%, with the market now expecting the next rate cut in September. With the TIPS break-even curve stable at the 2.50-2.75% range, in my view a neutral policy would be around 3.50-3.75%. That means that the market is expecting that the Fed will go past neutral and into the accommodative zone.

NoFutureIn21Century

Yes, that's what a targeted 2 % yearly inflation is supposed to look like. Now go buy some index funds or TIPS.

skilliard7

They went down in value because yields(future expected return) went up. Yields and prices are inverse of each other. I'm assuming you bought 10 year TIPS based on the price change. These had negative yields at the time you bought them, but at current prices, they yield about 1.5% + inflation. Buying Nvidia wont magically fix your mistake unless you have a time machine. It's already had its run.

fabtasticx

I personally have not invested in a sibling, but I have been investing in my children. I opened up custodial roth IRA's since birth and put $10 in every week. They will not touch the IRA account until age 65. Once they are of age to work, I will set their paychecks up to deposit $10 every week in it. By the age of 65, they should have over $1.5 million dollars. By that time I will have a trust fund set up qhere my inheritance will be and I will have it set that they will get a check of just the interest it makes and it will be evenly split between my two kids so they are not tempted to blow everything. Anyways, I currently also opened up a childrens savings for them where all their bday money and Christmas money go every year. I have also been looking into opening up a Series I Savings Bond or a TIPS, which both are protected against inflation. A Treasury Inflation Protected Securities (TIPS): Offers greater liquidity and higher purchasing limits. You can choose a 5, 10, or 30-year term. The minimum cost is $100. A Series I Savings Bond (I Bonds): Have a fixed rate component and may offer tax benefits for qualified education expenses. It matures in 30 years but can be redeemed after 1 year. Penalties apply if redeemed before 5 years. Both are very safe ways to invest, and I too wouldn't give them the earnings until they have fully matured. Personally, I might lean towards TIPS, though, where I would move their savings money so it can grow more. I also heard great things about opening up a passive manage index fund & ETF for kids. I hope that helps!

Zmill

If you’re worried about inflation, buy TIPS.

Natural_person-007

ha, i would probably never have bought TIPS, bought it by mistake originally :(

Natural_person-007

it matures in 2032 (10 year TIPS bought in 2022) and is in taxable brokerage Not sure what ytd return is . This is what Fidelity shows '**UNITED STATES TREAS NTS SER A-2032 0.12500% Jan-15-2032**'

kronco

What is the year to date return? Any bond purchased at the beginning of 2022 will have lost value as that was one of the worst years for bonds. But, they should be doing OK recently. When do they mature? Are they in an IRA or 401K? TIPS can be a bit of a pain in terms of taxes if in a taxable brokerage account due to "tips phantom tax".

woome

Hypothetically, if you had not taken any losses (or hypothetical gains), would you spend your current balance on TIPS today? If yes, what would be your time horizon, x?

zxc123zxc123

>Buy TIPS for hyperinflation bet >US has NEVER gone into hyperinflation >Fed still worried about 3% inflation >USD still global reserve currency >Countries that are in MUCH worse situations like Russia, Argentina, and Iran aren't in hyperinflation >OP's extremely unlikely scenario plays out and US goes into hyper inflation >TRUMP: "JUST FIRED THE STATISTIANS IN CHARGE OF ECONOMIC DATA. NEW INFLATION PRINT OUT FROM DON JR. LAST MONTH'S INFLATION IS -1000%. THANK YOU FOR YOUR ATTENTIONT TO THIS MATTER. >OP goes bankrupt If you're so worried about an improbable hyper inflation scenario then you might want to buy gold, food like tuna cans, rural farm land, a bunker, liquor, meds, a power generator, and lots of guns + ammo.

weasler7

I did the same as you. More gold and shorter bond duration. I don’t have a big position in bonds, but it’s clear that total market bond funds may not protect you in a downturn (eg 2022 in a rising rate environment). I added more ex US international exposure. I think Europe has a tailwind considering dollar depreciation. I liked TIPS too but if the BLS becomes politicized they will become worthless.

AlarmingConsequence

I want to be sure I understand what you are saying. Do I have this correct? 1. Without competent and independent BLS workers, who are willing to share bad news (like fewer jobs)... 1. then BLS cannot be trusted to accurately report increasing inflation, ... 1. and real life information which is not acknowledged by the government ... 1. won't trigger inflation protection of TIPS. 1. TIPS which don't receive their promised inflation protect are worse than corporate bonds because they have lower yields compensate for their inflation protection. Do I have that correct?

WhereIsMySun

This. I'm into some data center and Healthcare REITs, infrastructure etfs, and TIPS etfs is something I'm curious about. However, I admittedly fucked up the last few years as a permabear and missed on wild gains. I really subscribe to Darius Dale's models (well, 42 Macro's) and am convinced in being generally bullish and specific really going heavy on MSFT and GOOGL (and adding if they dip) as they seem to be growing in terms of AWS' marketshare. Genuinely dk what this feels like.

A1L1V2

Very, but when and how it rears its ugly head will probably be unexpected. Good decisions require good and accurate data, so don’t expect good decisions. I’ve been sitting on a sizable position of TIPS for over a decade now, and I questioning PCE and CPI data for a couple years now, this does concern me for sure, firing her doesn’t surprise me, but my concern lies upon the process of how that data is gathered and calculated. For example the jobs numbers, the government sends out surveys to tens of thousands of businesses, but not every one responds back in a timely manner, but they still report back even if it’s just a couple weeks of data from say. A couple thousand businesses, so they extrapolate that data as an average to all of America which isn’t completely accurate, it’s an estimate based on a few responses. As times goes on and more businesses reply, it changes previously reported info hence why we revisions to previous data, it’s because more people respond to those surveys. A quick leadership lesson: Embracing reality, understanding it, and dealing with it well are requirements to successful leadership. Those who can’t, get stuck on the same problems over and over again. As he is the leader of our country, we also get to deal with the consequences of his decisions good or bad whether we like it or not. Firing the person who provides data won’t change the data, but he may try to find someone who will mold the data in a way that appeases his childish emotions. trump has a history with dealing with large amounts of debt within his past businesses and organizations and it isn’t good. He’s had multiple defaults on debt and considers it a good business decision. So he clearly hasn’t learned anything about dealing with debt well. Once you understand his methods of dealing with debt, consider how that plays out as he is now the leader of federal government which also has sizable amounts of debt in the form of treasury bonds. How Trump deals with our debt problem will dictate the future of our equity markets.

Life_One_6012

Park your money in TIPS. But zoom out on any broad based index and look at major crisis periods in the world. If you have 10+ years to retirement, we’ll likely weather this storm.

ybockyhc

Cash, TIPS, real estate investment trusts of a variety of different industries. Maybe a few ETFs that benefit from down markets- not investment advice just giving hypothetical possibilities. Good luck with your investments

D74248

No small consideration for people holding TIPS. Or for the Treasury when they try to sell them.

D74248

TIPS are dependent on having reasonably accurate CPI numbers. CPI comes out of the Bureau of Labor Statistics -- the head of which Trump just fired for delivering bad news. I hold TIPS in my bond ladder. Yesterday morning I thought that they were a solid part of the foundation of my portfolio and protection from stagflation. What a difference 24 hours can make.

giraloco

I wouldn't call it questionable. It will be unusable and should be ignored. We will have to rely on private organizations for statistics. The next administration will have to pay compensation to people who lost money because of the fake data. Like $2T in TIPS that are indexed using inflation statistics.

15pH

Stagflation is coming to America. Invest in emerging markets and long-dated TIPS and maybe commodities.

Efficient_Patience13

This makes me worried to be holding TIPS (Treasury Inflation Protected Securities, VIPSX).

skilliard7

Well I guess I can't trust TIPS to act as a stagflation hedge anymore if he is willing to fire people that report truthful numbers :/

Cool_Giraffe6495

I don't see anything wrong in holding 10-20% T-bills (or bonds) if you're 80-90% equity. (or whatever % one would use). A T-bill & TIPS combo is not bad. 100% equity (let's say in retirement) is Las Vegas style of gambling.

SuspectMore4271

Can you explain to me why your definition of inflation, which only includes the average person’s basket of goods, is important enough to purchase insurance against? You’re really making the case that one’s own life choices and income level is what determines the level of expenses they can handle. Yet you recommend TIPS

SuspectMore4271

> The inflation I experience will likely be correlated to general inflation, though. I just pulled up my annual budget data from 2019 to 2024, here are the rates of inflation I experienced over that time. 2019-2020: -9.64% 2020-2021: +24.4% 2021-2022: +37.14% 2022-2023: +24.8% 2023-2024: +27.8% Do you think TIPS would adequately hedge against those inflation rates? Do they seem correlated to the national average?

skilliard7

> What I’m asking is why you think that 2.3% applies to you personally. It doesn’t, the inflation you experience is unique to you. I don’t need to hedge against some macroeconomic metric just because a product is offered for that purpose. The inflation I experience will likely be correlated to general inflation, though. Whereas a 30 year fixed US treasury can be inflated away by money printing, 30 year TIPS cannot. >Investors fall into the same trap when looking at hedging against inflation. They understand the threat and want to address it, it’s an emotional decision not a logical one. For me, it's not just about insurance. It's about maximizing returns over the long term. When you consider high CAPE ratios on US stocks, austerity measures, high bond yields, and the trade war, I strongly believe that 30 year TIPS will outperform most asset classes over the long term.

skilliard7

I mean how else can you hedge? It's not like I can buy futures contracts against the very specific things I personally like to buy. The spread between long term treasuries and long term TIPS is about 2.3%. It's not unreasonable to think that CPI growth will exceed 2.3%.

skilliard7

For now. Rates could be cut to 0%. You need to buy long term TIPS if you want to protect purchasing power long term

doctor--whom

They have different tax treatment and purposes. Say the muni bond funds, if you placed them in a tax deferred account you’d be wasting the fact that they’re exempt from state and federal tax. The TIPS fund hedges against inflation. I’d say the total bond market fund (or sort of categorically all taxable bond funds) would be best placed in a tax deferred account whereas the municipal bond funds and treasury bond funds have tax advantages that might justify putting them in a taxable account. All in all bonds come in different flavors and which one you pick depends on your goal.

skilliard7

>Yes the monetary conditions are not exactly the same. That's what makes things worse. At least in 2021, low interest rates justified stock prices. But right now, you can get 5% on 30 year bonds or 2.65% + inflation protection on TIPS.