I have some TIPS maturing next month.Long term TIPS yields have continued to fall with real yields from 5 to 30 years around 1.4 to 1.9%
Has anyone else thought about switching to I Bonds before the fixed rate (1.3%) resets at the end of October?
My current long-term individual TIPS holdings are yielding around 1.9% real, so but I'll think about swapping if they fall below 1.6%.
I might sell my holdings in a intermediate-term TIPS ETF (SCHP) soon to simplify my portfolio and rebalance.
I'm still on the fence about this, but I think I will probably use the proceeds to buy my limit of I-bonds ($20K) at the end of October if TIPS yields remain below 1.8% for the 2040 maturity TIPS, locking in the 1.3% fixed rate. The rest of the proceeds will go into TIPS. I sold about $300K of low yielding I-bonds last year and used the proceeds to buy TIPS, but when TIPS yields sank to I forget...1.6%? 1.7%? around the same time of year last year I bought $20K of 2023 I-bonds at 1.3%. Other than that, essentially all of my fixed income investments are in a TIPS ladder.
That would leave me with $40K at 1.3% real that I could tap into after 5 years with no penalty or risk of loss at any time I wanted.,,,the flexibility is worth something (though it is hard for me to put a value on it).
If the yield on the 2040 TIPS is above 1.8% towards the end of October I will probably forego buying more I-bonds and just buy more TIPS.
Statistics: Posted by protagonist — Tue Sep 10, 2024 10:38 pm — Replies 3620 — Views 886763