Advisors recommending TIPs always talk about the inflation protection but leave a hole where their discussion about interest rates should be.
Statements like "TIPS are anticipating no inflation for at least 7 years" is plain misleading. TIPS might be anticipating 10% inflation - and 10% interest rates, too. In which case they could easily be overpriced.
A year ago the "market participants" staked billions that the DJI was worth 13,000. That oil was worth $80... oops, no, $147.. oops we mean $38... How did that work out for you?
On Dec 31 04:18 AM Dr Feelgood wrote:
> Who should we believe: the writer who simply states his opinion on > the likely course of inflation, or market participants who stake > billions on the outcome? I prefer people who put their money where > there mouths are, as opposed to those who simply talk. Last time > I talked to my bank manager he told me he liked what I said but he > can't credit my account with it.
A Tip on TIPS [View article]
Statements like "TIPS are anticipating no inflation for at least 7 years" is plain misleading. TIPS might be anticipating 10% inflation - and 10% interest rates, too. In which case they could easily be overpriced.
A Tip on TIPS [View article]
On Dec 31 04:18 AM Dr Feelgood wrote:
> Who should we believe: the writer who simply states his opinion on
> the likely course of inflation, or market participants who stake
> billions on the outcome? I prefer people who put their money where
> there mouths are, as opposed to those who simply talk. Last time
> I talked to my bank manager he told me he liked what I said but he
> can't credit my account with it.
Tuesday Outlook: New World Order? [View article]