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iShares 20+ Year Treasury Bond Message Board

  • sweetliberty17761776 sweetliberty17761776 Apr 9, 2014 10:46 AM Flag

    thoughts on the vipsx as a way

    to play the markets

    or

    vfiix

    thanks

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    • As for the VIPSX, I owned an inflation-protected bond fund (TIP) from early 2010 until early last year and it did quite well when everyone (including myself) was expecting higher inflation. But I sold it when I became convinced that disinflation or even deflation were likelier (it's harder to create inflation than most people think). Since that time TIP has dropped about 10%. With CPI trending downward (averaging around 1.25% YoY for the past 6 months), it's hard to see the upside of an inflation-protected bond fund at the moment.

      As for the GNMA fund, I don't know enough about it. I got burned years ago, though, investing in a fund like that. If interest rates happened to rise, you get hit from the decline in value. If rates happen to fall, you're subject to prepayment risk. Maybe in a low-rate environment such as this, that's not as much of a risk.

 
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