Protect your retirement and investment from Treasury Inflation Protected Securities – TIPS are failing miserably
Marla Guthrie
Jul. 6, 2008

TIPS, whose principal amount rises with the Labor Department's consumer price index, are failing miserably. Treasury Inflation Protected Securities were the proffered choice of folks that want to stay safe with treasury securities that do not deplete with inflation. But that is no longer the case.

Treasury Inflation Protected Securities aren''t living up to their name for bond investors who say they can''t trust the way the U.S. government calculates the rising cost of consumer goods.

The $500 billion TIPS market's 4 percent returns this year have beat a 2.2 percent gain for Treasuries, according to Merrill Lynch & Co. indexes. TIPS should pay more, because the consumer price index downplays the 45 percent increase in gasoline and a 165 percent rise in corn in the past year.

In addition look at asset based inflation in real estate in the last eight years. The real asset prices and commodity prices have almost tripled but the TIPS has provided little protection on the real inflation.

The biggest problem is that the Government inflation data is hiding the real inflation. Neither asset based inflation or essential commodities like gasoline or corn or wheat prices are reflected in Consumer Price Index.

What can you do? Look for Treasury funds that actually hedges with gold, real estate and Commodity futures contracts. If you don move on this and listen to old-fashioned financial advisors still suggesting TIPS, you will sit and become poor before you can even realize. Inflation is biggest enemy of the fixed income investors.

Protect your retirement and investment from Treasury Inflation Protected Securities – TIPS are failing miserably
Marla Guthrie
TIPS, whose principal amount rises with the Labor Department's consumer price index, are failing miserably.
READ MORE>>

Commodity Futures Trading Commission (CFTC) under fire for failing to discourage speculation in oil and grains futures
Kirsten Zella
What happened in the oil and grains futures since middle of 2006 is a real shame for any one who understands...
READ MORE>>

$150 oil can bring down the empire of US commercial real estate deepening the financial meltdown and depressing the economy
Walter Pyka
The $4.25 gas price is affecting many Americans like never before. The emergence of Internet as a marvelous business tool...
READ MORE>>

Leveraged-buyout loan defaults will skyrocket making global stock markets collapse with thousands of international bankruptcies
Marla Guthrie
The global stock markets are poised tom crash in the next two years. Companies bought by private-equity firms worldwide must repay the...
READ MORE>>

Financial meltdown accelerates – UBS, Europe’s biggest casualty of the US subprime crisis finds itself in further write down of losses in investment bankling
Sam Adelton
While many in the financial communities were embracing stability in debt related loss write downs, the UBS finally came out with a shocker.
READ MORE>>

MORE ARTICLES >>