No. of Recommendations: 6
As many know, I have have tracked the prices and yields of TIPS for years.

During the late 2008 crisis, the Treasury-TIPS yield inverted. Always positive, it suddenly turned negative. This presented an unusual opportunity, which I shared with board members.

Some of the TIPS I bought then matured on 4/15/2011. They had about 2.5 years left on them, and were yielding about 2.4% (over inflation).

I also bought several TIPS that matured from 1 year to 10 years after 2008. The curve was steep, with shorter terms yielding much more than longer terms. The market was volatile. The longest term I bought (10 years) yielded 2.96%.

Today, the 5 year TIPS yield is -0.26% and the 10 year TIPS yield is 0.74%. This is historically very low.

I'm very sorry that I can't replace my matured TIPS. Of course, the capital gains are nice.

Once the Chinese began buying TIPS, a much smaller market than Treasuries, the yields fell and never bounced back.

Wendy (cross-posted on METAR)
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
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.