Can Tips Be a Good Diversifier in Certain Market Environments?

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Roland Martin: Can tips be helpful diversified at treasuries and other assets in certain market environments, e.g. following rates rising inflation? He says they're almost never going to have a situation where you have falling rates and rising inflation because that's the condition under which central banks typically raise rates. Martin: The data does not support it. We are finally now getting institutions to say that out loud. Nobody wants to admit that they've been wrong for 10 or 20 years when they've been babbling about tips as an inflation hedge but they need to admit it.

In this episode we answer two looooong emails from Mark and Andreas. We discuss Mark's quandaries with a 457 plan and Andreas's Risk Parity fever brought on by topics that include how to choose ETFs for each asset class, leverage in bond funds, TIPS, a proposed portfolio, other alternatives like long-short, market neutral and options strategies and musings about taxes and currency exposures. And then we conclude with Polo Hofer.

Links:

Father McKenna Center donation page: Donate - Father McKenna Center

Risk Parity Chronicles video tutorial on asset swapping: How to Do an Asset Swap - YouTube

Risk Parity Chronicles series on TIPS: Eight Observations About TIPS (riskparitychronicles.com)

ETF Database: ETF Database: The Original & Comprehensive Guide to ETFs (etfdb.com)

Bloomberg Presentation on Asset Classes in Inflationary Environments: MH201-SteveHou-Bloomberg.pdf (markethuddle.com)

Vanguard Commodities Paper: Commodity investing and its role in a portfolio (vanguard.com)

Antti Ilmanen books: Books by Antti Ilmanen (Author of Expected Returns) (goodreads.com)

EconoMe Conference: EconoMe Conference - March 17th-19th, 2023