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Andrew Tobias
Andrew Tobias

Money and Other Subjects

TIPS and Other Tips

July 29, 2003January 22, 2017

TIPS

Readers of this column have done well with 30-year TIPS (Treasury Inflation Protected Securities). This past June 3, with the 30-year 3.375% TIPS at around 123, up more than 23% in a year, I said I was selling some of mine, hoping to buy them back lower. Yesterday, they closed at 111-and-change, so I’ve bought some back. (All this in my tax-free retirement account, which is the best place to own TIPS because of the way they are taxed.) This is not to say they could not go lower. They could and may! But at this price, and if they fall further, I think they again represent a good conservative long-term value.

Click here (and scroll down a bit) to see current TIPS prices and yields. (Note that Treasuries are quoted in thirty-seconds of a dollar, so when you see ‘111-08,’ for example, that means ‘111 and eight thirty-seconds,’ or 111-1/4, which means $1112.50 per $1,000 bond. With TIPS it’s actually a little more complicated, because there is also an inflation factor not shown in the quote – plus, as with any bond not in default, accrued interest.)

I also wrote about TIPS this past March 31, and updated four other stocks (that comment in black, today’s update in red):

  • Real estate investment trust BF Saul, BFS, first mentioned here at $16.75 on May 3, 2000. It pays $1.56 dividend and was $23.25 or so November 25, up 38% – which is about where it was again this past Friday. I worry about the real estate market, but it still yields 6.6% and I have held much of mine. July 29 update: It closed yesterday up a further 19%-plus-dividend, at $27.65. That still leaves the yield above 5% with a chance for further price appreciation, but I’m selling the shares I have in my tax-sheltered account.
  • Enterprise Production Partners, EPD, then $17.75, now $20.80, up 16% plus a few months of its hefty dividend. July 29 update: It closed yesterday at up a further 5%-plus-dividend, at $21.98. The current dividend rate works out to 6.6%.
  • Ferrell Gas Partners, FGP, then $20.50, just a few cents higher today, which yields better than 9%. July 29 update: It closed yesterday at up a further 11%-plus-dividend, at $22.87. The current dividend rate works out to 8.6%.
  • The Templeton Russia Fund TRF, then $19.60, about a dollar higher today. July 29 update: It closed yesterday up a further 30%, at $26.62. I remain hopeful for the long term, but this may be only because I can pronounce “strogoye pryedupryezhdyeniye.”

As always: take these kinds of comments largely for entertainment value. If you ever lost money as a result of this column, I would feel truly rotten.

YOUNG REPUBLICANS

For Salon’s report from the college Republicans biennial convention, click here. (“As conservatives, we don’t hate America,” Erickson told his young audience. “The life of a liberal is hell. It is not possible to have a debate, a discussion, with someone who at their root, at their core, hates everything this country stands for but doesn’t hate it enough to leave.”)

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