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August 31, 2022
CNBC: Who wants to be a billionaire? 6 in 10 Americans strive to be mega-wealthy, report finds
Six in 10 adults say they even want to become a billionaire one day, according to a recent report.
If 60% of Americans get their wish, then hello hyperinflation. Talk about unintended wish consequences.
Some 44% of U.S. adults believe they have the available tools to become billionaires, largely fueled by speculative investments such as cryptocurrencies, according to the Harris Poll’s recent Americans and Billionaires Survey.
Gone is the old school illusion of prosperity era. All hail the new and improved delusion of prosperity era! 44% can't be wrong!!
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
16 hours ago
6 comments:
This is off topic, but thought you'd care to comment. According to lazyportfolioetf.com/etf/vanguard-shortterm-infl-prot-secs-vtip-dividend-yield/ the trade-off between taking dividends on VTIP rather than reinvesting them in further shares is such that keeping VTIP as a perpetual CD might be attractive. What's your opinion?
Anonymous,
A short-term TIPS fund seems like a pretty good choice in this uncertain environment.
Pros:
1. The real yield is currently positive.
2. Keeps up with inflation, at least in the short-term.
3. Not much duration risk should real interest rates continue to rise.
Cons:
1. If real yields revert to negative again, using it as a perpetual CD would be painful long-term. You’ll wish you’d locked in something longer term to match your perpetual plan.
2. If the economy experiences another deflationary style crash again, the bonds will deflate (since they are tied to inflation).
I too am looking for something long-term. I am tempted to buy an individual long-term TIPS in my IRA with the intent to hold to maturity again. Lock in these positive real yields long-term. I say with the intent to hold to maturity because I last sold when long-term real yields turned decidedly negative and the TIPS bond I purchased had greatly appreciated in price. Very tempted to repeat the process now that the long-term TIPS bonds are cheaper and yields are higher again.
Holding long-term TIPS to maturity is just about the least stressful investment I’ve ever had, other than the super safe I-Bonds that I still own. There’s peace of mind knowing that if inflation is 10%, then I-Bonds are also inflating at at least 10%, and can also never fall in price (even during deflation and/or rising interest rates).
As a side note, I treated the long-term TIPS bond I owned in my IRA as a perpetual CD. The interest payments kept accumulating and I eventually used the money to buy yet another TIPS bond. I also still own individual long-term TIPS bonds outside my retirement account and use the interest they generate to supplement my income. No complaints on owning those. They’ve been good to me long-term, especially with inflation running hot.
You might consider I-Bonds when the interest rate for new purchases resets in November. There’s a good chance it will increase from 0.0% to something much more attractive. Locking I-Bonds for 30 years is about as perpetual as it gets. I first started buying in 2000, thankfully.
I just bought some 12 month T-bills, locked in 3.462% for one year. Probably a loss to inflation, but maybe things will be more clear by then, or the worst of the pain will be over. Will have to reinvest a maturing bond in 2 weeks so will have to make another decision. Ironically, 3 months ago, I thought the interest picture and direction of the economy would be clear by now.
Mr Slippery,
Recently locking in the yield on TLT has been painful, with about a fourth of that pain hitting just today.
I too thought we’d be seeing with more clarity by now, but the fog persists. If the Fed continues its pace for much longer, the fog will definitely clear and we’ll be left wishing we were back in the relative safety of the eye of the hurricane. Sigh.
TLT has taken some punches this month. The Fed insists on more rate hikes despite the hikes already having a dramatic effect on markets, housing, and inflation. They know there is always a delay but I guess are trying to change inflation psychology regardless of effects on the economy. Maybe that's what they have to do. When they are done, there should be great values across the curve. Also great values in long duration stuff like EDV. How nice would a 15.84% 10 year treasury be if we can repeat that event from 1981?
Yeah, it’s been a brutal month. I’m staying the course and continuing to reinvest the dividends back into TLT.
Might regret it, but…
https://www.nbcnews.com/news/amp/rcna45662
I don’t see how this ends well. Again.
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