VTAPX
VANGUARD SHORT-TERM INFLATION-PROTECTED SECURITIES INDEX FUND ADMIRAL SHARES
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I'm a 35M, and my total Vanguard overall investment portfolio currently sits quite equity-heavy: \-76% in VTSAX \-17% in VTIAX, both in my taxable brokerage \-the remaining 7% in my 401K, invested in C975 Fidelity 500 Index Fund So roughly 100% in equities, with the US performance skewing my initial 80-20 approach I set 4 years ago. I'm looking to start slowly using my quarterly dividend yield to branch into VTAPX and maybe some VBTLX depending.
My humble suggestions: 1. Pick up a copy of Morgan Housel's *The Psychology of Money* and read it. Then do the same with *A Random Walk Down Wall Street* by Burton Malkiel and *All About Asset Allocation* by Rick Ferri. 2. Out of the hypothetical million, set aside enough for your immediate family's short-term needs. Make sure to have an emergency fund of at least six months' worth of living expenses. Examine whether it makes sense to pay off the home mortgage, or at least make additional payments on it each year. Set aside enough for the kids college funds, if that aligns with your children's ages and goals. You might find that a million bucks doesn't go as far as it used to... 3. Take whatever funds are available for long-term investment and put them to work in pursuit of a coherent investment strategy. Housel, Malkiel, and Ferri, the authors I mentioned, are all r/Bogleheads, i.e. investors who follow the strategy outlined by Jack Bogle, the founder of Vanguard. In general this means a small number of broadly diversified index funds that track the returns of the total market, in order to seek a reasonable long-term return without excess risk. The go-to funds for this strategy are VTSAX (Vanguard Total US Stock Market), VTIAX (Vanguard Total International Stock Market), and VTBLX (Vanguard Total US Bond Market). Some investors also add VTAPX (Vanguard TIPS) to the fixed income portfolio to address inflation risk. The precise asset allocation is very subjective, depending on appetite for volatility and other psychological factors, hence the three books I suggested above. 4. Perhaps the most difficult task: Once invested, leave the money alone. Don't tinker. Stay the course. It's not timing the market, but rather time in the market that greatly determines investment success. 5. Once you have real financial wealth at stake, get a good CFP (Certified Financial Planner) and estate planning lawyer to help with legacy planning. Advisors should be paid by the hour or by a fixed-fee schedule, never from a percentage of assets under management. Finally, recognize the truism, eloquently stated by the Scottish poet Robert Burns, that the best laid schemes of mice and men often go awry. Perhaps the single most important investment is not money, but the time and effort taken to raise our children to be people of good conscience, strong moral fiber, and unflappable work ethic who, of their own volition, take on responsibility for being financially prudent. Alas, the adage, "rags to riches to rags in three generations" exists for a reason. I wish you and your family good fortune.
Thank you for the response. I have considered moving a bit, hence the VTAPX "place holder". I just wasn't sure what a good % would be. Appreciate the detailed answer.
Pretty much all 401k plans will have a cash equivalent. In your case, it's a stable fund which is Putnam Stable Value Fund. Stable funds use insurance in the form of GICs and wrap products. They can be favorable in low interest rates environments. But not so much at the moment. The short-term bond fund VTAPX looks like it's indexed to 0-5 year TIPS. So you would hold that investment for about 2.5 years to get the yield to maturity. Since it's a 401k where you would be contributing regularly - is there are reason why you are trying to time the market with your 401k plan? Or are you risk adverse and retiring in a few years?
Hi! I need to choose funds for my new 401k plan. I wanted something like Fidelity’s SPAXX money market that has been paying 5% for about a year now because in early February, I’ll liquid to buy company stock. Unfortunately, there’s no money markets to choose. I don’t know much about how to read yield/returns on bond or capital preservation funds. My goal is capital preservation but I’m not sure that the Putnam Stable Value Fund is truly the best choice. Is that what you would choose? Bond choices: FXNAX Fidelity US Bond Index PIMIX PIMCO Income Institutional VIIGX Vanguard Intermediate-Term Treasury Index Institutional VTAPX Vanguard Short-Term Inflation Protected Sec Index Admiral Capital Preservation: PSVF15 Putnam Stable Value Fund 15bps
Your original post asks if 100% in stocks in your portfolio with 80% in 401k/20% in IRA is an asset allocation. The % of funds in 401k vs. IRA is not an asset allocation. AA is the % of your entire portfolio that are in stocks vs bonds. The place where you put your stocks/bonds is asset placement and is a different thing that is used to optimize growth & taxes. If 100% of your IRA is in bonds, then yes your portfolio would be 80/20. I see nothing in later comments about a 70/30 allocation. But if that is what you are doing, then it sounds good and probably you should edit your post to clarify. Right now your post clearly reads you are 100% in stocks across BOTH 401k & IRA. I don't use VTAPX (I use BND) but it seems fine. Just hold your porfolio to your target allocation, let the market do the driving by monitoring major shifts in your allocation %, and you should be set to ride out whatever happens.
Aren't TIPS or TIPS index like VTAPX bonds? I'm pretty much trying to do that, keeping around 70% stocks in 401k and go 30% TIPS in IRA, not sure why comments here ignored that. I said only the IRA account not the 401k. My 401k has around 80% of my retirement funds.
Uhhh i do see a slight dip in https://ycharts.com/mutual_funds/M:VTAPX/dividend_yield
Can confirm some data on vanguard inflation protected fund, rates are dropping slightly. https://ycharts.com/mutual_funds/M:VTAPX/dividend_yield Regardless, there are always buying opportunities
VTAPX is not an etf and it [not lost money over its lifetime](https://stockcharts.com/freecharts/perf.php?VTAPX&p=6). Hard to give a serious answer to this question but props to Omnuk for managing it.
Bond funds are required to distribute all their income. For TIPS funds that means both interest income and inflation income. Yes the price is down since last year, but during the same period VTAPX distributed about $1.60. That’s roughly between 6-7% of the share price during the period. That money left the fund and lowered the share price. The fund price is down because the securities in the portfolio get priced and rising interest rates cause bond prices to fall. If the fund was allowed to reinvest its distributions, the share price would look better. Instead they give the shareholder the option to reinvest or not.
VTAPX, 6.8%. I wonder what the catch is… and why their price dropped
Your 8.45% yield is way nicer than VTAPX…. Also it looks way more turbulent
Are you asking about VTAPX? …. Found https://minafi.com/fund/compare/vipsx-vs-vtapx
Any thoughts on TIPS funds? In 2021, I thought I did the smart thing by moving some of my cash into a TIPS fund (VTAPX or the VTIP etf), since it looked like inflation was going to be bad. However, I guess I didn't really understand the fund's behavior... The price of the fund has gone down about 8% since then. I did receive some hefty dividends, but they don't make up for the NAV loss; Plus, I'll now owe tax on those dividends. I would've been better off just holding cash. I'm thinking about just selling the TIPS fund, and moving the money into treasuries. Any thoughts?
What I’d like to see is a bond with Dated date the beginning of last year, so we can see the inflation factor for 2021 - 2022. But I agree TIPS are good right now as a low risk asset that provides good returns. I had my money in VTAPX for several months earlier this year and avoided a big part of the market selloff
There are ibond funds, VTAPX has a 2 year duration. The price doesn’t fluctuate a lot and it pays quarterly. I’m thinking the next Interest distribution will be quite nice, if reinvested
TIPS funds are still subject to interest rate risk, so I use a mix. The duplication is a matter of convenience. VTAPX - Vanguard short term TIPS fund VTIP - Short-term TIPS ETF FLOT - Investment quality bank loan floating rate ETF VUBFX - Vanguard ultra-short term bond fund
TIPS funds seem pretty safe. I don’t have huge confidence that the Fed will take necessary steps to quickly contain inflation. VTAPX
I would think most securities allow buying of TIPS, there are also ETFs/funds that may invest in diversified TIPS securities such as VTAPX. Before you trade anything in inflation, make sure you understand the complexities of the market. At least research seasonality and how whatever product you want to trade lags from the index. Gold has a weak positive correlation with inflation. See below for more details https://www.reuters.com/article/sponsored/beyond-cpi-gold-as-a-strategic-inflation-hedge
I totally forgot about VTIP/VTAPX. It was one of a few options that came up in my research when I was looking at alternatives for some of the cash I have sitting in an HYSA. Ultimately I put $20K into I bonds and left the remainder in the HYSA, but I need to keep VTAPX in mind as an HYSA alternative for some more of my cash if inflation stays high and the HYSA interest rate stays way below inflation.
Probably VTAPX which is 0.06% expense ratio.
Maybe a TIPS fund like VTAPX or it’s etf version VTIP.
Seems like most folks are saying No. I'm a newbie. My question for the naysayers: Would it make sense to put an emergency fund in Short-Term Inflation-Protected Securities (bonds)? VTAPX, for example? Or would you say that's still too risky?