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Ray Dalio on "Money"

I found this opinion interesting in the context of our discussions in and around TIPS. Basically, if you take all the bs out of crypto and coin and what not, Dalio is suggesting a future where we hold cash indexed to inflation. TIPS are just that minus the cash in the bank part. TIPS Bond holders get inflation + real yields. If one likes inflation linked cash, that means Real Yield = zero. Right now TIPS offers Real Yields of +1.4-1.7% depending on the maturity. This is part of the reason I am leaning into TIPS. As @yogibearbull has often written, he prefers 5 year TIPS. There too one gets 1.4% Real yield and much less duration than the 30 year TIPS which makes the 5-year bonds less volatile.

In any case, increasingly I feel the inflation priced into the bond market of around 2.25% and the inflation I feel all around me are such different things. I don't quite know what's a good answer to the problem except holding a healthy amount of TIPS. Of course if you hold stocks for the very very long run, eventually the earnings and dividends are in excess of whatever yields tips will generate.


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