coherent commentary

10-Year TIPS: An Investor's Benchmark

Owen, ok you got me on the pluralization. Thanks for pointing that out. But you might want to go ahead and correct the people who write the U.S. Treasury website, because they refer to it the same way I did. Oh, and while you're over there arguing with those folks about how they're spelling the bonds they issue, have a gander at the way tips bonds work. I'm not going to argue with you until you read it but it says that the principal is adjusted up or down to reflect inflation or deflation. At the maturity of a TIPS, you receive the adjusted principal or the original principal, whichever is greater. So, If you buy one in the secondary market that has been adjusted up over the last few years, you stand the (slim) chance that it gets adjusted down over the next few years and in that case you could lose your principal.