In a recent post, WCI said something that really caught my attention:
“[TIPS] are bonds whose value is indexed to inflation. This is one of my favorite funds and one I’ve owned for years.”
That sentence deserves its own blog post and I would love to read an elaboration on that point.
As a newbie, I've read every blog post by WCI, POF, & TFB. I can't get enough of this stuff and owe these gents a debt of gratitude. My mistake was to buy some TIPS [VIPSX] in my Roth prior to hammering out an IPS. I now have to work backwards and figure out where they fit, if at all.
Opinions on TIPS are all over the place, especially at Bogleheads. I was initially drawn to them for diversification and because guys like Jim and Harry seem to like them, but I'm leaning more toward the simplicity of VBTLX. Further simplicity isn't always a good thing, but I do love the idea of the Three-Fund portfolio.
Bernstein seems to suggest owning a lot of them closer to retirement, Harry's Cascading Asset Allocation® suggests 50/50 with nominals, and our very own WCI has 10%.
While they only protect investors against unexpected inflation on the percentage they own in their portfolio, maybe there is more than meets the eye? Why do you invest in them or why do you avoid them?
Thanks.
“[TIPS] are bonds whose value is indexed to inflation. This is one of my favorite funds and one I’ve owned for years.”
That sentence deserves its own blog post and I would love to read an elaboration on that point.
As a newbie, I've read every blog post by WCI, POF, & TFB. I can't get enough of this stuff and owe these gents a debt of gratitude. My mistake was to buy some TIPS [VIPSX] in my Roth prior to hammering out an IPS. I now have to work backwards and figure out where they fit, if at all.
Opinions on TIPS are all over the place, especially at Bogleheads. I was initially drawn to them for diversification and because guys like Jim and Harry seem to like them, but I'm leaning more toward the simplicity of VBTLX. Further simplicity isn't always a good thing, but I do love the idea of the Three-Fund portfolio.
Bernstein seems to suggest owning a lot of them closer to retirement, Harry's Cascading Asset Allocation® suggests 50/50 with nominals, and our very own WCI has 10%.
While they only protect investors against unexpected inflation on the percentage they own in their portfolio, maybe there is more than meets the eye? Why do you invest in them or why do you avoid them?
Thanks.
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