Lots of recent publicity are in the financial media about how TIPS funds can legitimately inflate their yields, in accordance with Securities and Exchange Commission rules. It’s easy to be hoodwinked into believing you are getting more than you are, while enjoying benefits of inflation protection.
However, I have never been a fan of TIPS. I have always explained its shortcomings on the return you get and tax subtractions. And how you can avoid inflation’s effect on fixed income investments with proper use of duration principles.
The problem is, most investors and those in the financial media are in the dark about the use of duration principles. ( See the Earl J. Weinreb NewsHole® comments.)
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