Comments on: TIPS Action Plan

By: Jonathan

Jonathan — Sun, 17 Jun 2007 06:28:00 +0000

Interesting. I keep meaning to read Larry Swedroe's book but for some reason reading 300 pages about bonds just doesn't excite me just yet. But I wouldn't mind reading your post on buying TIPS directly vs. TIPS fund.

By: TFB

TFB — Wed, 13 Jun 2007 23:27:00 +0000

I thought I wrote about TIPS funds before but apparently not. It will be covered in the next post.

I buy TIPS in my IRA. That rules out Treasury Direct because they can't handle IRAs. I've bought both actual notes and VIPSX before. Funds like VIPSX are easier to buy and sell. Buying actual TIPS notes saves a bit of money but you have to be your own fund manager which could be headache or thrill depending on your inclination.

That's the trade off: convenience vs saving a little money, just like hiring a contractor vs DIY home repair.

By: Anonymous

Anonymous — Wed, 13 Jun 2007 23:03:00 +0000

When you buying TIPS, it is better to buy from Treasury direct or Vanguard VIPSX? What is thet trade off?

I don't link Treasury direct to charge $45 when you want to sell, and treasury direct only set TIPS at certain time?

By: TFB

TFB — Wed, 13 Jun 2007 17:59:00 +0000

"Historically" is only about 10 years for the U.S. with a big bear market in the middle, when we had really low interest rates. Who knows how high the rates can go. It's hard to extrapulate a quick spike into the future. Maybe it will keep going up; maybe it will level off; maybe it will come down quickly. We will just have to wait and see. It's impossible to time it. I'm keeping some amo just in case.

By: indexfundfan

indexfundfan — Wed, 13 Jun 2007 17:36:00 +0000

Great post! Although I am not sure if historically, TIPS has ever yielded more than 4% real rate.

I don't have much room to play with in my IRA but I shifted a significant part of the cash sitting in the Prime MMF to VIPSX in my IRA yesterday and the day before.

indexfundfan @ indextown