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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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TIPS Update: Running Out Of Upside Potential? |
Seeking Alpha - Dec. 7, 2011 - By Calafia Beach Pundit
TIPS are Treasury bonds whose principal is adjusted for consumer price inflation; buy $1000 worth of TIPS and their face value will appreciate in line with the rise in the CPI. TIPS have a coupon which is paid on the inflation-adjusted principal, so the coupon functions as a real yield. The owner of TIPS receives a total return that is equal to the rise in inflation plus the real yield. Like all bonds, TIPS prices vary inversely with their real yield. So yesterday's 0% real yield on 10-yr TIPS means that the price of TIPS has reached an all-time high; in absolute terms, TIPS have never been more expensive. (The colored zones in the chart above--click to enlarge--are my way of appreciating the "value" inherent in TIPS' real yield.)
Another way of assessing the value of TIPS is to compare them to regular Treasury bonds of similar maturity. The difference between the nominal yield on Treasuries and the real yield on TIPS is the "break-even" or expected rate of inflation over the life of the bonds. As of yesterday, the expected annual inflation that is priced into 10-yr TIPS and 10-yr Treasuries is 2.1%, which is just a shade better than the average that has prevailed since TIPS were first issued in 1997, and a little below the 2.4% average annual rate of consumer price inflation since 1997. So relative to Treasuries, TIPS are about "average:" neither expensive nor cheap, because they are priced to an expectation that inflation in the future will be about the same as it has been in the past.
For the complete article and graphs.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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