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As you may know, the vast bulk of my nest egg sits in TIPS and I-Bonds.
TIPS Prices Likely to Fall
Full Disclosure: I am long TIPS and TIP as of this writing.
He's warning others that TIPS and TIP are expensive even though he owns both. It is refreshing to see that.
This is not a strong "sell" recommendation on TIPS, since I think they still make sense for those who want some conservative long-term protection against rising inflation.
That's pretty much exactly where I stand. Further, I hope he is right. I hope TIPS prices do fall.
Here's something I wrote back in April on Yahoo's TIP message board.
Be Careful What You Wish For
"Be careful what you wish for, lest it come true." - Edgar Allen Poe
I have TIP in my IRA and I plan to keep it there for many, many years.
So what should I wish the price of TIP to do? The easy answer would be that I would wish for the price to go up. Right?
I want it to go down. It will hurt me in the short-term, but I'll more than make it up with higher real yields going forward.
The worst possible thing would be for TIP to rise to the point that the real yields become 0%. From that point on all it would do is track inflation and it could never grow in real terms. Low real yields are not a saver's friend.
I own individual TIPS and I hold them until maturity. I always want higher real yields (and lower prices). I never want lower real yields. I have some maturing next year and I'd like to be able to lock in a higher interest rate then. All I would get from rooting for lower real yields would be bragging rights and the ability to earn less interest in the future. I'll pass on that.
If you are a long-term TIP investor and want to own TIP into the distant future, then cheer up. It might not feel like it, but today's drop in price was a good thing.
If you are a short-term TIP investor then I can't really help you. You lost money today and no good came of it. Sorry.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
-
At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
11 hours ago
16 comments:
TIPS are complicated!
My word verification is "shien" which is one of the major forms of lightsaber combat (I prefer makashi myself).
Benadryl is complicated!
It's 91.4 degrees and all the pollen in Western Washington is looking to reside in my nose today! Okay, maybe not all of it but it sure feels like it.
Benadryl
Diphenhydramine is used to relieve red, irritated, itchy, watery eyes; sneezing; and runny nose caused by hay fever, allergies, or the common cold.
Yay! Reduced nasal congestion!
increased chest congestion
Boo! Increased chest congestion!
I would guess that there is another drug I could take that would reduce my chest congestion but add to my nasal congestion! You know, just to balance it all out again.
Benadryl should be prescribed by economists. It's like a housing tax credit.
Diphenhydramine will relieve the symptoms of these conditions but will not treat the cause of the symptoms or speed recovery.
See!
try cetrizine (zertec) it should be better on the lungs; stay away from pseuphedrine (sudafed) as the rebound effect is worse than the original problem.
Just opinions!
GYSC,
We have Costco's brand of zertec. My girlfriend swears by it. I've tried it several times in the past but it doesn't seem to do much for me.
She also swears by sudafed and nasal decongestant sprays, but like you I want no part of that. I remember how well they worked as a kid until I tried to stop using them.
"I remember how well they worked as a kid until I tried to stop using them."
Xactly! We used to use the sprays in boxing to keep the nose clear, but after you stop all the blood vessels open up big time and cause worse swelling. Its a no win situation!
Mark,
I used to have terrible allergies in the east coast and I know how annoying it can be (in fact my drug rotation stopped working for me after some time). I now use the following on the west coast with great success:
unrefined (greyish brown color) sea salt. saturate it in a 1/4cup of warm water. snort it through the cup the palm of hand. need to snort it all the way through and blow it back out. it stops the itching and resolves the issues that i have. (also great for the flu!).
If you use real unrefined sea salt it does not bun at all..
Caution: do not use iodized table salt!! or white refined sea salt. both will be very unpleasant!
Lastly, regularly consume local honey (local is critical as pollen is from your area). This will greatly help build indifference to the pollen.
with natural remedies, it's usually best to be patient (you won't always get results immediately but you invest in them...
good luck!
p.s. pardon lack of editing, very tired from terrorist mosquito in bedroom preventing sleep.
GYSC,
Neo-Synephrine Addiction
Try quitting Neo-Synephrine on a weekend or some other time when good nighttime sleep is not as essential.
I'd like to think good nighttime sleep is pretty much always essential, lol.
remy,
My dad was a firm believer in your salt strategy.
I often use saline nasal sprays. It can help a bit but unfortunately it is my eyes that bug me most.
I use artificial tears for my eyes and that also helps.
Fortunately, my seasonal allergies tend to only last a few weeks to the point I feel the need to medicate.
It went from the 70s to the 90s quickly so I think pretty much everything with pollen is coming for me right now.
In high school I think I set a record for maximum sneezes in a row. I had a summer job that lasted about 3 hours. I was dropped off in a pea field with instructions to remove the wrong colored pea flowers. Three hours later they came back to see how everyone was doing.
I had been sneezing non-stop the entire time. I figure that was about 1,800 sneezes (10 per minute). They took me straight to the doctor!
Why buy TIPS?
Mortgage rates hit an all-time low today! It's time to buy ticker symbol HOUSE.
G.H.
I'll pass on HOUSE.
While Most Markets Improved in April 2010, Home Prices Do Not Yet Show Signs of
Sustained Recovery According to the S&P/Case-Shiller Home Price Indices (pdf)
Mark - could you do an update to this post?
http://illusionofprosperity.blogspot.com/2007/09/mortgage-debt-vs-salaries-and-wages.html
Thanks
jus me
jus me,
I can and will. Great choice! There's something new to see.
Stag,
"I'll pass on HOUSE."
How are you going to perform the patriotic duty of stimulating the economy, providing jobs, and increasing rates of homeownership without buying a house or two or three?
What do you expect homebuilders to do? Retrain themselves to become nurses?
John Paulson Says the Time to Buy a House in the U.S. Is Right Now
"The man who made billions betting against the subprime mortgage market seems to have a more positive view of our real estate market these days. John Paulson told a captive audience at the London School of Economics that now is the best time ever to buy a house in the United States."
C'mon, tell me you don't trust this guy.
"He's bullish on real estate and gold, and thinks inflation is lurking around the corner."
OK, so nevermind that last statement, let's move on...
"And he's bullish on the U.S. economy. Paulson says he thinks we are at the tail of the credit crisis, which has stifled much home buying. He believes we are in the midst of a sustained recovery..."
Let's party and buy houses like it's 1999!!
G.H.,
What do you expect homebuilders to do? Retrain themselves to become nurses?
How Do I Become a Demolitions Expert?
To become a demolition expert, you may first want to obtain background training in construction work.
1. Build it.
2. Blow it up.
3. Repeat!
You're right.
I bookmarked this link when it was posted over a year ago.
New Homes Demolished in Victorville, CA
Coming to a neighborhood/town/city/county/state/nation/continent near you.
G.H.,
Mayor Dave Bing of Detroit is the true master of demolition.
The World's Vacant Homes
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