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Add TIPS (TIP) to the list of safe-havens proving to be anything but as this sort of...

Add TIPS (TIP) to the list of safe-havens proving to be anything but as this sort of inflation-protection doesn't work when rates rise but inflation doesn't. The rout has sent the yield on 10-year TIPS into positive territory for the first time since Dec. 2011, reports Carolyn Cui. Investors have pulled $7.2B out of TIPS ETFs this year, already more than the $5.2B inflow for all 2012.
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Comments (3)
  • PACKER man
    , contributor
    Comments (177) | Send Message
     
    When TIPS broke their 200 day moving average I "bailed" and luckily so... Why wait for your head to be handed to you???
    12 Jun 2013, 05:24 PM Reply Like
  • Tipswatch
    , contributor
    Comments (22) | Send Message
     
    I can't believe how many people think a TIPS mutual can't lose value. My thinking was that there was a 10% capital risk when rates started rising. We've seen more than 6% already in 45 days.

     

    However, I still contend that buying and holding TIPS to maturity (supplemented by I Bonds) is extremely conservative. You know exactly the return you will get, plus inflation, and you can ignore the secondary market and 'duration' is not relevant.

     

    If inflation is muted, you have a lousy investment but no loss of money, at all. It is a logical way to preserve capital.
    12 Jun 2013, 05:25 PM Reply Like
  • ChappyDave
    , contributor
    Comments (23) | Send Message
     
    The big risk is this: inflation may rage but the index is rigged so as not to indicate any inflation...
    12 Jun 2013, 08:41 PM Reply Like
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