What are treasury inflation protected securities?

15th Dec 2009 by Gary

Also known as TIPS, Treasury Inflation Protected Securities are exactly what their name implies: protection against inflation if it rises. When you invest in this type of security, you are guaranteed your investment will go up if inflation does based on the consumer price index. Of course the down side is if it doens't go up, you're stuck with a lower interest rate that can be detrimental in a non-inflationary period of time.

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