UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35644  
Subject: Re: Vanguard Talk about GNMA TIPs Funds Date: 4/24/2003 12:33 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
>>expect total returns over time (he didn't say how long, as I remember) that equal the interest returns at the time you invest

Thanks for the link. I think Mr. TIPS is warning novice investors (who may judge a fund by its NAV chart) to look at the current yield alone when setting expectations for future returns.

But you make a more subtile point: Will your total return tend to regress to the yield at investment, since if the yield rises, the NAV will drop and vice versa. That sounds reasonable in the medium term. In the short term, interest rates will affect the NAV, but not the yield. In the long term, the bonds which existed in the fund when you bought it will be flushed out and will not affect your total return.

I own bond funds for the long term, and for the yield only, so my only hope is interest rates rise. I don't care if the NAV goes to 1, or 1000. At least I don't think I care, since I'm only 80% sure I understand how bond funds work!

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next


Foolanthropy 2015!
Fistula Foundation: A World of Good!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.