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Vanguard Inflation-Protected Secs Message Board

  • buyusamade buyusamade Oct 7, 2010 9:23 AM Flag

    Any Advisor Advice Welcome

    I got in this at what looks like now was a very good time as this fund has increased nicely; however I dont want to hold too long if the fundamentals point toward a decline. The scenarios which I thought would make it decline seem to be incorrect as it seems everything has made this increase in value. Gold up--this up. Dollar down---this up. Interest rates down--this up. Threat of inflation (higher rates)-this up. Stocks up--this up. What is the primary driver of this fund? Dollar and fed easing?
    What do you all think will be its turning point? Recovery and more sense of security means money will flow out into the market? If rates and inflation increases, money will flow out into C.D.'s even though this has "inflation protection" ? My short term fear is that there will be some short term euphoria when the dems get a butt kicking in a few weeks and this fund will suffer. Agree? Disagree?

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    • VIPSX is good for inflation protection. It could go down in price, though, with interest rate increases, just like any bond fund.

      For interest rate protection, try JFR. It is an ETF made up of short-term corporate notes. The notes have short maturities (like 30-90 days) so the ETF manager can reset to the higher rates faster than holding long-term bonds. THus, its price should not be affected much by interest rate increases.

      Another idea for inflation protection is something like FNMIX, and emerging market bond fund. It's really "dollar devaluation" protection. If the dollars goes down in value against foreign currencies, like the BRICS, it should still perform, though it will be sensitive to interest rate increases.

      I hold all three and some old individual bonds that are maturing soon.

    • Be afraid, be very afraid, watch the sky, watch everything. Be afraid.

    • This funds performs like any bond fund. As rates go higher, the price of bonds go down, as does the return of the funds.

      If you think rates are going higher, I would avoid this fund.

      LT

      • 2 Replies to longterminvestor15
      • Where did you read, or how do you know, this performs like a bond fund?

      • I have held this for quite some time. Started trimming back when it went over $13.65. Sold a big chunk today. Interest rates can't go any lower. Inflation will come at some point, but right now the government is getting away with printing money willy-nilly because the average Joe is "deleveraging" (losing his job, house, going BK and generally not spending money). Given that backdrop, the long term Bond rally has run it's course.

        I will keep some of this and the Vanguard Total Bond Fund in my portfolio, but it only comprises about 15% now, down from a high of 50% awhile ago.

        Adding a bit to stocks, but for now the proceeds are mostly in cash. I expect stocks to correct some, but a fundamental rally is still in place. Can't argue with the trendline.

    • Hi Nukid,
      Last two days seem to have set a trend,Down.The Treasuries 30,10 & 5 yr are up a lot,VIPSX down 0.07 2 days in a row. Whats the answere?? Ideas welcome.,Regards,CptJrg.

    • VIPSX...Stick with it, inflation is here now and around the corner it will only go higher. Are you paying less for a loaf of bread then you did 6 months ago?

    • if it goes down a buy on the dips

      the gop is the dems they still want our money

      the debt is the dbt
      those pos hate America and will cry that they need the WH or a majority etc

      If true fiscal conservatives took in over the government this would still be a good investment in my opinion

      I am no financial expert but I am in commonsense

      do your dd
      and good luck
      WE'RE GOING TO NEED IT

 
VIPSX
13.29-0.03(-0.23%)Sep 18 6:24 PMEDT

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