STIP - Why VTIP And STIP Are The Stock Market's Best Groundhogs

• With the market experiencing heightened volatility, investors and analysts would benefit from paying less attention to media noise and more to concrete leading indicators.
• No asset can perfectly predict stocks, but bonds are a great starting point since they're less prone to emotion-led turbulence and short-squeezes.
• In my view, investors should keep an eye on the rising trend in real interest rates since they directly measure the actual economic value of savings and costs of borrowing.
• Short-term inflation-indexed rate funds such as VTIP and STIP are best since they give us direct insight into the real short-run value of cash.
• If STIP breaks firmly below the $104.5-$105 range, I believe stocks will head lower as real borrowing costs spike. Conversely, if STIP bounces from here, stocks may continue higher.

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