Treasury Inflation Protected Securities - Worth It?

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

While the U.S. economy is in recession and the stock market in shambles, is it a good idea to invest in Treasury Inflation Protected Securities (TIPS)?

We feel that this is probably the best time to invest in TIPS. The reason being the fact that our economy is in deflation (negative inflation). TIPS safe guard our investments against inflation. So once the economy begins to inflate (which might happen sooner than we think since the government is trying its best to reflate the economy), our money will be protected against inflation.

It is to be noted that in general, TIPS might provide a return of at most 2% after inflation. This information will aid us to keep our expectations about ROI (Return On Investment) at a sane level. We have invested in TIPS in our tax deferred accounts like IRA and 401(k) to save on taxes.

Check out this article where Scott Burns from AssetBuilder.com provides (detailed) expert advice in this area to a specific question from a reader.

Deflation May Be in the News, But Inflation Protection Is Still Valuable

Image Source(s): iStockPhoto

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