Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

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Doc
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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by Doc » Sun Dec 10, 2017 11:39 am

MtnBiker wrote:
Sat Dec 09, 2017 12:40 pm
I would like to ask the experts on here what they think would be the best strategy for when to buy a TIPS ladder under present market conditions.
If you have enough just buy the whole thing now, put your computer in the closet, go fishing or golfing or whatever mountain biking and just enjoy your retirement.

If you are concerned with interest rates going up, still buy the whole thing now but buy triple rungs of tens and for the next ten years as each rung matures spend one and roll the other two. Modify as needed for the second ten year period.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by MtnBiker » Tue Dec 12, 2017 12:33 pm

Grok & Doc: Thank you for your insights and advice. I'll probably start by buying some at auction in the coming months. Meanwhile I will continue my education and will begin monitoring interest rates.

Looking at the history of interest rates over the past five years I have an observation. Real (and nominal) rates increased sharply in the spring of 2013, spring of 2015, and in November 2016. The 2013 and 2016 events were associated with the taper tantrum and the last presidential election. Apparently more favorable buying opportunities can develop when unexpected events send shock waves through the financial markets.

grok87
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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by grok87 » Tue Dec 12, 2017 6:26 pm

MtnBiker wrote:
Tue Dec 12, 2017 12:33 pm
Grok & Doc: Thank you for your insights and advice. I'll probably start by buying some at auction in the coming months. Meanwhile I will continue my education and will begin monitoring interest rates.

Looking at the history of interest rates over the past five years I have an observation. Real (and nominal) rates increased sharply in the spring of 2013, spring of 2015, and in November 2016. The 2013 and 2016 events were associated with the taper tantrum and the last presidential election. Apparently more favorable buying opportunities can develop when unexpected events send shock waves through the financial markets.
Cuts both ways though. Real rates could go a lot lower.
"...people always live for ever when there is any annuity to be paid them"- Jane Austen

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by grok87 » Thu Dec 14, 2017 2:52 pm

30 year yield now at 0.76%!
"...people always live for ever when there is any annuity to be paid them"- Jane Austen

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by Always passive » Thu Dec 14, 2017 3:07 pm

Is 0.76% real yield supposed to be good?

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by grok87 » Thu Dec 14, 2017 3:40 pm

Always passive wrote:
Thu Dec 14, 2017 3:07 pm
Is 0.76% real yield supposed to be good?
Right now 30 year tips yields have been grinding lower since spiking over 1% earlier in the year.

Over the past 5 years the yields have been in a 0.5% to 1.5% range.

It's hard to know...
"...people always live for ever when there is any annuity to be paid them"- Jane Austen

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by saltycaper » Thu Dec 14, 2017 3:42 pm

As recently as the winter of 2015 and the fall of 2016, the rate on the 30-year TIPS got down to around 0.5%. Back in early 2012, it was about 0.25%. It certainly can happen again. Meanwhile, on the nominal side, the yield curve has been flattening.
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

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Re: Grok's Tip #8:Retire Worry-Free with TIPs as a foundation

Post by Doc » Thu Dec 14, 2017 5:16 pm

grok87 wrote:
Thu Dec 14, 2017 3:40 pm
Always passive wrote:
Thu Dec 14, 2017 3:07 pm
Is 0.76% real yield supposed to be good?
Right now 30 year tips yields have been grinding lower since spiking over 1% earlier in the year.

Over the past 5 years the yields have been in a 0.5% to 1.5% range.

It's hard to know...
But we can speculate. :wink:

Image
https://www.treasury.gov/resource-cente ... ation.aspx
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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