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iShares TIPS Bond Message Board

  • bergholt@sbcglobal.net bergholt Nov 11, 2009 1:48 PM Flag

    Took half off the table

    When one is up this much in less than two months, prudence dictates a bit of profit-taking.

    I'll slap it back into TIP when valuations get a tad more reasonable.

    I know, I know, this is supposed to be an investment, not a trade, but I hate to let green fade to red.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Did the same thing, a little premature but that's okay.

    • I think taking some profit here is not unsound (double negative, sorry) and agree that when you're up this much in a couple months you may want to avoid watching the "winnings" slip away. I also have no problem sitting on some cash if that money has 1. earned well beyond expectation and 2. I plan to reinvest it again in TIPS when the price comes down a little.

      I, too, am really thinking about taking some profit here, over $105/sh, but will reinvest that sum in TIP again when it comes down. But the lion's share of my TIP investment stays put. Ultimately I'd like to have 20% of my portfolio here because I firmly believe inflation will be significant in years to come.

    • Surely you can go even further back in time and slap even more 1-star ratings on all my posts. There are still a few 5-star posts left that people once thought had at least some merit.

      Talk about childish.

      You are confirming my faith that this country is going down the toilet. Rather than debate my points openly and fairly, you'd rather just stick a knife in my back under the cover of anonimity. Nice.

      It was only a matter of time though. These boards always degenerate once enough people show up. I just expected more UPPERCASE, "SHORT THIS PIG!", and/or off-topic angry political commentary first.

      Further, slapping similarly low ratings on another's post simply for taking "half of the table" is even more childish (and selfish) in my opinion. That post actually inspired a lot of healthy debate.

    • "However, I just feel, you know, better, having taken profits.

      When anything is up over 15%/annum, I get nervous and jerky, and tend to take a bit off the table."

      Nothing wrong with that mindset. Certainly beats the "buy it just because it went up" momentum mindset in my opinion.

      Let's sum this up using nothing but hindsight to make the call. That way we don't need to be psychic going forward.

      1. If you don't mind trading, there were far worse times to sell than right now. Few ever went broke taking profits.
      2. For long-term buy and hold types such as myself, TIPS have done very well over the last decade compared to both riskier assets such as stocks AND supposedly safer assets such as cash, even when factoring in TWO stock market crashes AND a housing market crash. Hindsight is hardly beating me up.

      In other words, perhaps both strategies are perfectly rational going forward. It may just come down to timing, pain tolerance, and/or patience. I don't want to try and time the next down leg, I don't panic easy if pain does appear, and I have the resources to be patient.

      My last big purchase was a 20-Year TIPS several years ago. I will be holding until it matures. I could care less what the market thinks it is worth on any given day. I'll be earning interest every year regardless. Although I have inflation protection, my real purchasing power would do best during deflation. There would be far less taxes.

      20-Year TIPS yields are still decent by the way. I think there's still value there. I don't think the market is nearly as bearish as I am long-term, at least not yet.

    • I'm certainly not going to heckle taking half off the table.

      I'm in the camp that thinks China is massively stimulating in a most unsustainable way. They can certainly add GDP by increasing production capacity and are doing just that. However, is adding production capacity during a production capacity glut such a great plan?

      What would have happened during our Great Depression if we would have continued to build more factories even as demand dropped? Would that really have solved all the problems?

      There are valid deflation risks. Few saw them last time. Few see them this time. That said, should the markets crash again, I'm just riding it out again.

      The primary risk you are taking is just one of timing in my opinion. The money you save avoiding a possible downdraft might be lost due to inflation eating your profits while you wait. That said, what you have done seems reasonably safe to me. I thought $103 was pretty much as far up as this fund could go without a boost from stagflation. Based on 99 cent bread, 50 cent canned vegetables, 99 cent eggs, and $1.88 bacon in this week's QFC grocery flyer, I'm just not seeing it.

      I am seeing neverending gold commercials and a distinct "sure thing" mentality in its parabolic price movement though. No way I'm chasing that. TIPS seem far safer by comparison. Contrary to popular opinion, gold is not good at ANY price.

    • You are taking one key gamble.
      TIPs are going up because of an increased sense of rising inflation expectations. You are gambling that inflation expectations with abate.

      • 2 Replies to kayneari
      • But there is another side to that coin. If he stays in then he's gambling that deflation won't be an issue at all. Personally, I still don't buy into the inflation argument. I'm with the OP. I took a 1/3 off the table already and plan on doing another 1/3 in the next couple of weeks.

      • bergholt@sbcglobal.net bergholt Nov 12, 2009 1:13 PM Flag

        Did I start a run on the bank?

        Maybe I should have taken it all off the table, as I did with VIPSX.

        Well, my bucks are safe, unless VMMXX breaks the buck. I have to wait a couple of months over at Vanguard to ponder whether to get back in. Right now, I'll just let green fade to green.

    • Good luck -

      It takes patience to just sit on cash ---- and wait for the right moent to invest

    • Where are you putting the proceeds from your sale ?

      I have been little by little accumulating my TIPS holdings as the market revives - and I am concerned with the run up on TIPS.

      Thanks

      • 1 Reply to kayneari
      • bergholt@sbcglobal.net bergholt Nov 11, 2009 6:46 PM Flag

        Given the fact it takes three days for the trade to settle, I'll ponder whether to re-invest or just sit on it. My tummy tells me just to sit on it. I still regard all this nonsense as a suckers' rally. No way the market is valued fairly at this point.

        Heck, I made about 3% in a couple of months trading a TIPS fund over at Vanguard. That's not, I say again, not, supposed to happen. A year's worth of interest in less than a couple of months?

        My tummy tells me to bank anything I'm up, and laugh all the way to the bank.

 
TIP
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