The Safest Investment There Is
Treasury Inflation-Protected Securities (TIPS)
Marvin Appel
Inflation is the enemy of the bond investor and is your enemy if you are living on a fixed income. Once you lock in a rate of return by buying a bond, if prices rise faster than your investment is growing, you are stuck. Fortunately, the federal government offers you a guaranteed way to beat inflation with no risk of losing any money: Treasury Inflation-Protected Securities (TIPS), also known as inflation-indexed Treasury notes (or bonds).
How TIPS Work
Most bonds are issued and later redeemed in units of $1,000. TIPS work differently: Although they are issued in units of $1,000, the principal value of the bonds, rather than staying at $1,000 throughout ...
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