3 ms·

Is that an inflation-adjusted return? Just curious, same thing applies whether you're comparing nominal return or real return, I just know there are "inflation-

Is that an inflation-adjusted return? Just curious, same thing applies whether you're comparing nominal return or real return, I just know there are "inflation-protected" bonds.

tekla 3y ago
And what are those inflation protected bonds returning?
- mrcode007 3y ago
  1.4% in TIPS auction from today.
  - mikhailfranco 3y ago
    The Fed buys TIPS to suppress the yield (inflation expectations). I know, that should be illegal, but when does that ever stop them.
    - HDThoreaun 3y ago
      Managing inflation expectations is the Feds main job.
dragontamer 3y ago
And what are the inflation adjusted returns of Stocks over the last year or two?
- tekla 3y ago
  3%. Still higher than inflation protected bonds.
  - metaphor 3y ago
    How'd you figure? Looking at the S&P 500[1] over the past two years relative to today's close: Aug 15, 2023 Close = $4,437.86 Aug 15, 2022 Close = $4,297.14 Aug 13, 2021 Close = $4,468.00 1-yr Return = +3.3% 2-yr Return = -0.7% ...and using the latest CPI-U data[2] over roughly the same period: Jul 2023 Index = 305.691 Jul 2022 Index = 296.276 Jul 2021 Index = 273.003 1-yr Inflation = +3.2% 2-yr Inflation = +12.0% ...I get real returns of +0.1% and -12.7% over 1- and 2-yr periods, respectively. Same exercise looking at Vanguard VTI ETF[3]: Aug 15, 2023 Close = $220.37 Aug 15, 2022 Close = $215.78 Aug 13, 2021 Close = $230.05 1-yr Return = +2.1% 2-yr Return = -4.2% ...I get real returns of -1.1% and -16.2% over 1- and 2-yr periods, respectively. [1] https://fred.stlouisfed.org/series/SP500 https://fred.stlouisfed.org/series/SP500 [2] https://fred.stlouisfed.org/series/CPIAUCNS https://fred.stlouisfed.org/series/CPIAUCNS [3] https://advisors.vanguard.com/investments/products/vti/vanguard-total-stock-market-etf https://advisors.vanguard.com/investments/products/vti/vangu...

Is that an inflation-adjusted return? Just curious, same thing applies whether you're comparing nominal return or real return, I just know there are "inflation-protected" bonds.

tekla 3y ago

And what are those inflation protected bonds returning?

mrcode007 3y ago
1.4% in TIPS auction from today.
- mikhailfranco 3y ago
  The Fed buys TIPS to suppress the yield (inflation expectations). I know, that should be illegal, but when does that ever stop them.
  - HDThoreaun 3y ago
    Managing inflation expectations is the Feds main job.

dragontamer 3y ago

And what are the inflation adjusted returns of Stocks over the last year or two?

tekla 3y ago
3%. Still higher than inflation protected bonds.
- metaphor 3y ago
  How'd you figure? Looking at the S&P 500[1] over the past two years relative to today's close: Aug 15, 2023 Close = $4,437.86 Aug 15, 2022 Close = $4,297.14 Aug 13, 2021 Close = $4,468.00 1-yr Return = +3.3% 2-yr Return = -0.7% ...and using the latest CPI-U data[2] over roughly the same period: Jul 2023 Index = 305.691 Jul 2022 Index = 296.276 Jul 2021 Index = 273.003 1-yr Inflation = +3.2% 2-yr Inflation = +12.0% ...I get real returns of +0.1% and -12.7% over 1- and 2-yr periods, respectively. Same exercise looking at Vanguard VTI ETF[3]: Aug 15, 2023 Close = $220.37 Aug 15, 2022 Close = $215.78 Aug 13, 2021 Close = $230.05 1-yr Return = +2.1% 2-yr Return = -4.2% ...I get real returns of -1.1% and -16.2% over 1- and 2-yr periods, respectively. [1] https://fred.stlouisfed.org/series/SP500 https://fred.stlouisfed.org/series/SP500 [2] https://fred.stlouisfed.org/series/CPIAUCNS https://fred.stlouisfed.org/series/CPIAUCNS [3] https://advisors.vanguard.com/investments/products/vti/vanguard-total-stock-market-etf https://advisors.vanguard.com/investments/products/vti/vangu...