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Learning, Sharing, and Teaching => Investor Alley => Topic started by: talltexan on October 16, 2018, 09:10:38 AM

Title: Should my bonds stake be in TIPS or treasuries?
Post by: talltexan on October 16, 2018, 09:10:38 AM
https://www.advisorperspectives.com/articles/2018/09/30/comparing-tips-to-nominal-bonds?channel=Fixed%20Income&bt_ee=K3XC6GunfxoEOhO6LKDGygnSf%2FBCnmW9nbseyhPmoHOSnIIMiAyjX1rdse%2Btauup&bt_ts=1538733707718 (https://www.advisorperspectives.com/articles/2018/09/30/comparing-tips-to-nominal-bonds?channel=Fixed%20Income&bt_ee=K3XC6GunfxoEOhO6LKDGygnSf%2FBCnmW9nbseyhPmoHOSnIIMiAyjX1rdse%2Btauup&bt_ts=1538733707718)

Larry Swedroe unpacks this question in his usual, systematic way.
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: maizefolk on October 16, 2018, 09:25:55 AM
Worth reading the whole article (it's a quick read) but the major takeaways seem to be

1) Because TIPS are marginally less liquid than regular treasuries, right now -- based on two different metrics for expected inflation -- there is no yield penalty and actually a small yield bonus to buying TIPS relative to regular treasuries.
2) In the absence of a yield penalty or even in the presence of a small (.0-0.5%/year) penalty it would make sense for investors to have the majority of they assets allocated to US government debt in TIPs rather than regular treasuries.
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: ChpBstrd on October 18, 2018, 01:20:38 PM
3) FDIC- insured CDs yield better than either, so if you are building a ladder don't buy TIPS or nominal treasuries.
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: talltexan on October 19, 2018, 11:38:18 AM
please tell me where you're finding CD's that yield in excess of 3.2%
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: cap396 on October 19, 2018, 08:56:37 PM
If you invest with Schwab, it has some 5-year CD's at 3.4% currently.
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: chasesfish on October 20, 2018, 06:09:43 AM
The yield curve is really flat, I'm finding short-term bond funds and brokered CDs are better than TIPS
Title: Re: Should my bonds stake be in TIPS or treasuries?
Post by: ChpBstrd on October 20, 2018, 09:24:30 AM
Quote from: talltexan on October 19, 2018, 11:38:18 AM
please tell me where you're finding CD's that yield in excess of 3.2%

https://www.nerdwallet.com/blog/banking/best-5-year-cd-rates/