Treasury Inflation Protected Securities
Treasury Inflation Protected Securities
Also referred to by it's abbreviation (TIPS). These are bascially treasury bonds that make up for inflation. For example if you hold a bond that is paying 5% interest, but inflation for that period of 6 months was 4%, you would normally only be making a 1% gain taking inflation into consideration. These treasury inflation protected bonds would increase their rate of return based on inflation. If the bond was paying 5% interest and inflation was 4%, then the bond would jump to 9% interest. This is probably the safest bond you can hold.
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