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tipswatcher

Very interesting podcast (they all are). My reaction is that Dr. Gray is probably super intelligent, but he communicates as a "regular guy," without loading us up with complex jargon. Impressive. We need more people like this in finance, and I thought his description of his factor funds was clear an...

tipswatcher

Fixed rate did not go up and buying by April 30 gave an initial 6-month rate of 2.83% vs. the 1.90% one got buying today. I don't see the "error". I appreciate that thought, but I'm still baffled by the Treasury's decision. I was pounding the table to buy I Bonds before May 1, to capture the best f...

tipswatcher

When I'm wrong, well ... "I was wrong." The Treasury has surprised me in the past by setting odd-ball fixed rates on the I Bond. This one was maybe the biggest surprise, for me, because the data showed a fixed rate of 0.2% to 03% looked much more likely than staying at 0.5%. However, I applaud the m...

tipswatcher

I'm still wondering if the OP listened to that podcast. Yes I listened to episode 8 today on my morning walk, and subscribed to the series. Lots of great information. It explained what I need (and want) is an "advice only" adviser who charges by the hour (or some kind of set fee) and does not take ...

tipswatcher

296 posts here and some ideas/plans haven't started to form for you? My wife and I have been diligent and intelligent in saving and investing. We've never needed a financial planner for that. But now we are entering this strange world of "withdrawing and spending." Lots of complex questions, but ma...

tipswatcher

This advisor bills itself as "fee only" because its only income comes from clients and the company receives nothing from the investment firms. Your model of "fee only" is what we are looking for.

tipswatcher

My wife and I recently retired and are now both on Medicare. Not taking Social Security, yet. Our retirement funds make up about 65% of our overall portfolio, and we have essentially zero in Roth accounts. It will all be taxable on withdrawal. So after 40 years of saving diligently, we now are enter...

tipswatcher

I admit to being very angry and baffled at learning that Vanguard was discontinuing the Advantage accounts, which my wife and I have been using for years. All we really needed was the ability to do check-writing and basic bill-paying out of the Treasury Money Market account, along with a connection ...

tipswatcher

Vanguard's decision to eliminate its Advantage service has thrown me for a loop. My wife and I have used this account, and its predecessors, for years as our main cash holding account, paired with a small amount of cash at Wells Fargo for ATMs and paying small bills. We haven't ever used the credit ...

tipswatcher

You can do checkwriting against the Federal MM account in brokerage, but only for >$250, only using paper checks. This is not what the Vanguard FAQ says ... https://vanguard.com/pdf/PVPDFCL_022019.pdf Checkwriting • Destroy all unused checks. • Checks presented for payment after July 31, 2019, will...

tipswatcher

I involuntarily retired two years ago, at 63, and my wife involuntarily retired on May 31 at 64. Her Cobra coverage allowed us to keep healthcare coverage through the start of Medicare, so those costs remained stable. We have always been big world travelers, and that has really stepped up since May,...

tipswatcher

I'm recently retired, and I do move all my taxable dividends and distributions from stock funds into either a money market fund (paying about 2%) or a short-term bond index (about the same). The idea is to make sure we always have at least a year's expenses in cash-like or short-term, safe investmen...

tipswatcher

Non-seasonally adjusted inflation is used to adjust the principal balances of Treasury Inflation-Protected Securities. Today's report means that those balances will fall 0.1% in May This was incorrect and I fixed it thanks to reader feedback, and I am sure that reader had to be a Boglehead. Smartes...

tipswatcher

Did anyone else buy in today's reopening of the 5 year? I bought at today's auction because I had an empty rung in my TIPS ladder for 2022. That was caused by the horrible yields back in 2012, when the 10-year yield was deeply negative. I wanted to fill that spot all year, but the yields weren't at...

tipswatcher

Interesting discussion. I never include my home in my asset allocation, but if I did, I'd call it 'real estate.' And owning real estate has lots of current costs, even if you have a paid-off mortgage. Ours has been paid off for 8 years. Our property tax bill is $6,400 / year, insurance is somewhere ...

tipswatcher

If you truly are open to reconsidering your decision, then did you sell your I Bonds with 0% or 0.1% fixed real rates in December 2015 and buy TIPS with the proceeds Whoa, I've been buying TIPS all along, whenever the real yield looks attractive. I am very reluctant to ever cash in a TIPS or I Bond...

tipswatcher

That's not true.

#Chuncher, I was meaning a TIPS can never fall before its par value at maturity. A TIPS can go way below that along the way, but at maturity, the par value is guaranteed. I corrected my post. And you know how much I love your feedback. You rule.

tipswatcher

What happens to i-bonds when inflation is negative? Well, here is one of the key differences between I Bonds and TIPS. When deflation strikes, I Bonds at worst can return 0.0% for six months. The accrued principal can never go down. I Bonds pay an interest rate based on inflation and when inflation...

tipswatcher

Do I understand i bonds and what am I missing? You stated the I Bond terms well. The one difference with a bank CD is current year income taxes on the interest. Plus in No. 1 you are earning interest based on past inflation, not future inflation. If inflation stays at the current muted level, below...

tipswatcher

In defense of Treasury Direct, I'd say the I Bond experience is MUCH better than the TIPS experience. The Treasury provides a Savings Bond Wizard so you can track your current values for savings bonds. But with TIPS, the Treasury gives you no way to view the current (inflation adjusted) value of you...

tipswatcher

Can someone help me understand why I cannot buy my annual max of iBonds right now in October vs waiting till November? Wouldn't I get the 0.1 fixed locked in and then the 2.76% on top of that? You can buy right now and guarantee the 0.1% fixed rate. You will get the current variable rate of 0.16% f...

tipswatcher

Here is the article, which I wrote: http://seekingalpha.com/article/4012796-breaking-news-bonds-variable-interest-rate-will-rise-2_76-percent-november-1 I suspect that I Bonds are going to be an extremely popular investment from November 2016 to April 2017, because that variable rate of 2.76% ensure...

tipswatcher

For a new issue, I think the Treasury's Real Yield Curve page is pretty accurate, and it's showing -0.20%.

https://www.treasury.gov/resource-cente ... =realyield

tipswatcher

I just bought a new car, paid cash. If the dealer was offering 0.0% financing, I would have taken it. Then I would have set up automatic payments from a money market account to pay the monthly bill. I would have never seen a bill, it would have just been paid. But the dealer wasn't offering 0.0%. So...

tipswatcher

I was in Glasgow, Scotland, on June 30, 2007, when two guys drove an explosives-laden Jeep into the front door of the airport. This bombing was timed to hit the day after the school term ended, a Saturday, so the airport was crowded with children and families. No one was seriously harmed except for ...

tipswatcher

My wife and I will be traveling to Italy in the spring and Poland in the fall. The euro is much lower now, making your dollar a lot stronger than a few years ago. We were in Netherlands/Belgium last year and the prices were surprisingly good. Even then, you saw a much higher level of security, espec...

tipswatcher

I just bought a new car, too, a Honda HR-V EX to replace my 8-year old VW GTI. (By the way, I love that Golf Sportwagen, too. Great choice.) I used to always look for a 3-year-old used car, but then I bought the VW new in 2008 and I had very good luck with it. It was reliable, fun to drive. Maintena...

tipswatcher

Avoid the noise. I would say that TIPS are getting more attractive in this current trend. Maybe not quite yet, but definitely more attractive. With TIPS, you are just looking for the yield over inflation. After mid-2011, that went negative, even extremely negative. As the 'real' yield (after inflati...

tipswatcher

Use TIPS if the difference is <2% (the Fed's inflation target) and nominals if it's greater than 2%. I have been accused of market-timing TIPS, but nope. I just buy them and hold to maturity. I do wait for opportune times to buy them. I don't have unlimited resources, so I want to get the best deal...

tipswatcher

So if I buy an i-bond now, it will never earn any interest for the life of the i-bond (30 years)?!? This is about to change, tomorrow in fact. The inflation adjusted rate for all the I Bonds you currently own will rise to 1.54%, annualized, for six months. When that happens depends on the month you...

tipswatcher

which is currently showing 1.24%

So much can happen in four days. Oh ... I have seen it.

tipswatcher

I am going to be in the zero camp, 0.0%. But I will be doing a little research to try to figure out what happened in November 2013, when the Treasury decided - surprisingly - to raise the I Bond's fixed rate to 0.2%. On Nov. 1, 2013, the 10-year TIPS was yielding 0.50%. A 10-year nominal Treasury wa...

tipswatcher

Something I have been pondering: The coupon rate of this TIPS is 0.750%. You can buy it at a 10-12% discount, and then you will collect 0.75% a year in interest on your accrued principal, which rises with inflation. That is 0.75% in cash flow, for 29 years, 4 months. The point is: The real yield of ...

tipswatcher

To be more explicit about the age thing. I think most people should 1)START buying 30 year tips At say age 35 and 2) STOP buying 30 year tips at age 65 I think that's good advice, although I personally stopped buying 30 years when I was 58 -- but that had more to do with the extremely low yields fr...

tipswatcher

Whatever #Cruncher says, I listen. They guy is nearly always right, but in this case he found some sort of little error in his theory? Doesn't matter to me. Also this entire spreadsheet thing doesn't matter to me. I just buy TIPS at auction a couple times a year, when the price (yield to maturity, a...

tipswatcher

Rather than saying the the 2nd TIPS is "exposed to deflation risk", I'd say that the 1st TIPS is more "exposed to a deflation bonus".

Fantastic explanation, #Cruncher.

tipswatcher

#Cruncher, correct as always. Starting this year, there are 20-year TIPS maturing in each year out to 2029, then an opening until 2032. I am trying to build my ladder with auction issues, not from the secondary market, which has some hefty accrued principal. But you are right it can be done My perso...

tipswatcher

I guess you must figure paying tax on phantom interest is OK? Phantom interest doesn't bother me, especially at likely inflation rates. If inflation suddenly soared to 20% ... Oops ... we'd have a problem. But I'd still be very happy to own an inflation-protected investment. If you hold bond funds ...

tipswatcher

if the yield on a 10 years TIPs is 0.49%, why is the yield on the Vanguard TIPs fund only 0.13%? Vanguard's TIPS fund holds a basket of TIPS of varying maturities, from less than one year to nearly 30 years. Since there are only about 39 TIPS currently trading on the secondary market, there's not a...

tipswatcher

10-year TIPS auctions with a real yield of 0.491%

http://tipswatch.com/2015/07/23/10-year ... -of-0-491/

A bit lower than I expected, but hey, it goes off at a discount. I'm happy with this purchase.

tipswatcher

I've decided to buy a small amount of this offering, hoping that the yield will stick above .50% creating a glorious coupon rate of 0.50%. It's not super-attractive, in my opinion, but I need to fill a 2025 spot in my TIPS ladder and this looks like a decent opportunity. Since I am buying a small am...

tipswatcher

15 inch MacBook Pro. Love it. I was surprised that the Apple store was selling refurbished 15" MacBook Pros starting at $1099. The $1099 model would be the non retina version with all the ports, quad core i7, Nvidia graphics card, spinning hard drive and optical drive. Apple refurbished has same wa...

tipswatcher

EE Bonds are looking very attractive for my 2015 savings bond investment (I know I can buy both but probably won't). If the fixed rate stays at 0.0% on May 1, we can assume the market for new purchases of I Bonds will dry up. Would the Treasury see that and add a small fixed rate to hold up demand? ...

tipswatcher

I also realized I'd be using it at home much more than hauling it around. This was my final decision point, too. Although I travel often and need a real computer, not an iPad, at times, I realized that for the other 40+ weeks, when I am at home, wouldn't I rather have a laptop that is simple to use...

tipswatcher

So, I pulled the trigger Saturday, but I bought the MacBook Pro 13-inch Retina, not the new MacBook. Why? I took a really long look at the 13-inch MacBook Pro at Best Buy and I loved the build quality and the size seemed fine. The screen is gorgeous. Once the reviews for the new MacBook started comi...

tipswatcher

I have a lot of thoughts on this, because I have putting more more thought into buying a new laptop than I ever did in allocating money in my 401(k) or buying a 10-year Treasury. What does that says about me? Not sure. I was awaiting Apple's announcement of the new 'MacBook Air Retina' - and was pre...

tipswatcher

#Cruncher ... I can be a moron at times, and my error on the 0.625% versus 0.750% proves it yet again. As of Friday, the real yield on a 30-year TIPS had risen to 0.68%, which would get that 0.625% coupon rate, and put the TIPS fairly close to cash-flow neutral, depending on the inflation rate, of c...

tipswatcher

The Treasury issues a daily estimate of real yields, which translate to TIPS yields, and it's usually pretty accurate: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield At the close Friday the 30-year real yield was 0.68%, up 14 basis points ...

tipswatcher

On I Bonds, I would suggest holding off on buying a 2015 allocation at least until May 1, and mostly likely after Nov. 1. On May 1, the fixed rate is likely to remain at 0.0%, but the inflation-adjusted rate (for all I Bonds, not matter when they were issued) is very likely to drop below zero. Right...

tipswatcher

With 5 year tips likely to go for north of 0.3% real and Ibonds at 0.0% real, I decided to go with todays tips auction. I am also buying this TIPS at auction today. Short-term yields for TIPS have 'skyrocketed' ... well, for TIPS anyway. This same TIPS reopened in an August auction with a yield of ...

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