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URL:  http://boards.fool.com/tips-watch-23848299.aspx

Subject:  TIPS watch Date:  3/17/2006  1:51 PM
Author:  WendyBG Number:  15810 of 35361

Today's Wall Street Journal: "...the real reason long-term Treasurys rallied is they have become despised as an asset class. [so slightly lower-than-expected inflation news caused a bounce.]

... just about any survey of sentiment indicates bearishness toward bonds. Primary dealers -- the firms that deal directly with the Federal Reserve -- are, on balance, betting against the 10-year Treasury note...

...most Wall Street economists expect long-term rates will be higher in six months. In another sign of bearishness on long-term bonds, professional bond managers surveyed by ISI Group show a marked preference for short-term Treasurys."

http://online.wsj.com/article/SB114255695641600784.html?mod=mkts_main_featured_stories_hs

I am still deciding whether to buy TIPS, at the April auction. The yield of both the 5 and 10 year TIPS has risen, recently, to 2.01% and 2.15%, respectively (the principal is inflation-adjusted). This is still well below the 50-year average of "real" (inflation-adjusted) rates, on long bonds.
http://www.martincapital.com/chart-pgs/CH_mmnry.HTM

The inflation differential (the difference between the regular T-Note and TIPS yield) has dropped, over the past couple of weeks (to 2.61% and 2.52%, respectively).

Thoughts?
Wendy




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