Though, of course, that $20 turns to $200 for $100,000 invested and $2,000 for $1,000,0000 invested ....A sobering thought:
Will I buy more TIPS? Probably not at 2.50%, but certainly if yields challenge their Fall 2023 highs. At this point I would have to liquidate TIAA Traditional to buy any more TIPS. (I have not been willing to liquidate equities to buy TIPS, although I’ve sometimes plowed in funds from profit-taking or rebalancing.)
I do believe I will get that opportunity to buy more TIPS. My prediction is for nominal yields to top 5.0% in the not too distant future here in 2025, making a breach of the old highs on long TIPS, near 2.70%, a distinct possibility.
A 0.2% difference (e.g.: 2.5% vs. 2.7%) translates into a WHOPPING $20/year difference in income per $10K invested. That won't pay for an hour of parking per year in NYC, and probably (hopefully) would have a meaningless effect on your life savings.
I prefer thinking of 0.2% as a factor of 0.002. It brings me down to earth.
Statistics: Posted by yankees60 — Sun Jan 12, 2025 1:34 pm