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)
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