Yesterday I bought some Treasury Inflation Protected Securities (TIPS) with a five year maturity at the U.S. Treasury Auction. I did this using a broker through my self-managed 401k brokerage account. This follows my purchase of 10 year TIPS last month. It was an interesting auction to be sure. [Read more…]
We bought some 10-year TIPS (Treasury Inflation Protected Securities) today, to be owned inside my 401(k) account. Although I can do most buying and selling inside that account online, bond purchases must be made using one of their trading desks. The commission isn’t bad: $50 flat fee.
If you are interested in owning Treasury Inflation Protected Securities (TIPS), the Treasury is supposed to make an official announcement today of a 9/2/2010 auction of TIPS having a ten year maturity. If you are within 1-10 years of retirement, this would be an excellent way to add to your portfolio of guaranteed, inflation adjusted assets.
Regular readers of this blog may recall that I have been studying the work of Zvi Bodie, a professor of finance at Boston University. (I mentioned Prof. Bodie in my post on Retirement Income and the Myth of Equity Risk.) After much consideration, I’ve decided to adopt Prof. Bodie’s concepts into our retirement income plan. More particularly, I have created a plan to provide guaranteed retirement income. I will explain.
All long term investors need core holdings that will protect against the damaging effects of inflation. Traditionally we have been told that equities in general are the answer to the inflation problem. Now we are not so sure. Based on this doubt, mutual fund companies continue to introduce new products specifically intended to provide inflation-protected growth. [Read more…]
If you have been a regular reader, you know that I am a fan of I-Bonds and Treasury Inflation Protected Securities (TIPS) as a secure retirement investment that is also an inflation hedge. If you can put them in a tax-deferred account, TIPS may work better, if only because you are limited in how many I-Bonds you can purchase in a year. A mutual fund company is now making it easier to benefit from TIPS as an investment using exchange-traded funds. [Read more…]
As baby boomers in the home stretch towards retirement, we have two major concerns about our retirement investing. The first is recovering from the severe damage our retirement nest eggs suffered from the recession and market downturn that began in 2008. The second concern is preparing for the threat of inflation that is likely to descend on our economy because of massive government budget deficits. [Read more…]
Inflation and interest rates are destined to change in the coming months, perhaps radically. These potential changes present significant risks to baby boomer investors. A CD ladder is often used as a safe way to control interest rate risk. A ladder of Treasury Inflation Protected Securities (TIPS) can provide both interest rate and inflation protection. [Read more…]