Browser wrote:Ahh - thanks Doc. Next question: which is more meaningful - inflation adjusted yield (TIAA) or non-adjusted yield (Vanguard)? Seems to me if the reason you're buying TiPS is to hedge real yield, the TIAA approach is more relevant. That would mean that, based on 30-day yield, you are losing a whopping amount of purchasing power in a TIPs fund. Not that you're not losing it in something else too....
Orion wrote:I can't quite get my head around this. If the VG fund is the real yield and the TIAA fund is the real yield plus CPI, then the CPI is -3.5%? Or am I doing this wrong?
I think both questions are answered by asking what meaning a 30 day inflation number means. Answer: meaningless. Orion, it would make the adjusted 30 day SEC yield erratic. Browser just take the unadjusted SEC yield and add 1.745993% which is my best estimate for the annual inflation rate at present.
A scientist looks for THE answer to a problem, an engineer looks for AN answer. Investing is not a science.