When the TIP price is below one hundred, the inflation adjusted yield curve is negative.
Monday, November 17, 2008
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In the early 80's, Jack was nicknamed T-Bond because he used leverage to buy as many 14% T-Bonds as he could. By the mid 80's he bought all the stock he could and, by the late 80's, he and his wife Marilyn invested their profits into 25 beautiful resort condos at Myrtle Beach. The question for smart investors still remains: Stocks, Bonds or Real Estate?
When the TIP price is below one hundred, the inflation adjusted yield curve is negative.
Posted by Jack Miller at 11/17/2008 04:35:00 PM
3 comments:
why if TIP price < 100, inflation adjusted curve is negative?
No. The TIP fund trades based on the net asset value of scores of different bonds of various maturities.
You can plot the yield curve by going to the St. Louis Fed site. The inverted yield is that the TIPS with short maturities yield much more than the TIPS with long maturities.
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