In my 2009 Investment Predictions I said that TIPs would substantially outperform treasuries. If you ran a bond desk and had this simple long TIPs/short Treasuries trade on your year is over and you are drinking copious amounts of champagne on a beach in the South Pacific while the rest of the world spirals into the burning depths of hell.
Treasuries are down roughly -13% YTD vs the 2% return on TIPs. A 60% annualized return in the bond market. Not bad.
TIPs, apparently, aren’t just for waiters….
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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