TIPS, anyone?

[Rukh O'Rorke]

ok I put another 100 into TIPS just so I would stand at an even 500. Silly, but it works for me.....


Security Type: 5-Year TIPS

Par Amount: $100.00

Inflation-Adjusted Value: Not available

Price per $100: 99.493344

Investment/Interest Rate: 1.625%


so just a slight discount on par and less than 2% interest rate. 

I have 3 $100 in 5 year, and 2 100 in 10 year. the 2 100 in 10 year are the same issue, just purchased at different times/terms, same with 2 of the 5 year, then a different issue 1 $100 5 year.

I am just going to keep these to maturity and see how they do. I prefer the treasuries and will focus on those, but at the end of the term - maybe a different story will emerge?

TBD!

[Rukh O'Rorke]

Well then!

So apparently - the inflation-adjusted face value of tips is TAXABLE yearly even though you haven't cashed them in and they could theoretically go down in value. 

For only 500 worth, I have 18.80 in taxable income to report.

Only for fed taxes I think, so there is that.

Non-triumphant.

[Rukh O'Rorke]

Just as an update -

Tips are looking more attractive at the moment. Interest rates are over 1% and recent auctions are showing purchase prices below par. my few holding have gained in value, so I am appreciating them a bit more. The auction prices that were way over par value on my first few purchases were concerning, so glad I was experimenting with only 100 dollars at a time.

After filling out my ibonds for the year, I may rethink TIPS and get some more. Still learning and doing research, so not entirely sure!