Monday, October 14, 2013
Once again we have the crisis of raising the US government debt ceiling, or defaulting on the national debt. The last time this happened, I sold my regular Treasuries ETF and glad that I did. I still own a TIPS (Treasury Inflation-Protected Securities) ETF, however. It's down quite a bit this year, but still above what I paid for it. So I'm wondering if I should sell it ahead of Thursday's possible default by the federal government. I'm inclined to think so, for two reasons: (1) the default, if it happens, will surely hit the prices of all government bonds, including TIPS, and (2) TIPS, or at least my TIPS fund, are mostly long-term bonds. Interest rates have nowhere to go but up from today's near-zero levels, and that will hit all long bonds.
Posted by RichardG at 10:43 AM