Yep. You can certainly do that. I had some some time in the past looking at just holding LTPZ, then switching to SCHP, then STIP. It does work but the withdrawals will be noisier than holding two TIPS funds at a time and deriving a couple of simple algebraic equations exactly one time, then plugging numbers into the equations each withdrawal period. And for many people, holding one at a time would be just fine.In DFA's target date retirement funds, I think it is.In the world of nominal bond funds many hold intermediate-term bond funds through their 60s and 70s and then switch, either gradually or all at once, to short-term bond funds in their 80s.
Why can the same approach not be used for inflation-protected bond funds? Why all this complicated duration matching with two or more inflation-protected funds and a bunch of algebraic equations?
The 2025 target date fund is like 70% TIPS and if you check out their glide path, the TIPS get shorter the older you are.
Again this is all personal choice.
Cheers.
Statistics: Posted by dcabler — Sat May 25, 2024 9:43 pm — Replies 132 — Views 7624