A TIP To The Wise: Don’t Look At TIPS To Protect Against Inflation From Here

SectorFinancial Markets
CountryMiddle east

Share to Linkedin I have had more conversations with investors about inflation recently than any time in the last decade. Wherever we look (or shop), prices are rising, rapidly, except in the "official" inflation statistics. The official inflation statistics such as the CPI, PCED etc. might not be the best metrics for inflation, as I wrote about last week (here).

But like a return of (for some, cringeworthy) fashions from the 1970s (i. e., bell bottoms and platform shoes), we know creeping 1970s-style inflation when we see it. So investors are looking for ways to measure and manage their portfolios against inflation with other assets and tools. Fortunately, the toolkit is large. To name a few: commodities (e. g. energy and metals), real estate, lower duration bonds, bitcoin, value stocks over growth, or one of the other popular ones: TIPS, or Treasury Inflation-Protected Securities, which we will discuss here. TIPS are indexed to the CPI, and the return is measured...read more...