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> TIPs [1] come damn close TBH I don't know too much about them, but from what I'm seeing they're something like 1-2% interest. Inflation is > 8% right now per
by reedjosh 4y ago
> TIPs [1] come damn close
TBH I don't know too much about them, but from what I'm seeing they're something like 1-2% interest. Inflation is > 8% right now per the government's own numbers
https://www.bankrate.com/rates/interest-rates/treasury/ https://www.bankrate.com/rates/interest-rates/treasury/
Am I mistaken? If so, I'd love to find a way to get guaranteed inflation beating returns.
- JumpCrisscross 4y ago> from what I'm seeing they're something like 1-2% interest. Inflation is > 8% right now per the government's own numbers That's a real yield. TIPs "adjust in price (principal amount) in order to maintain their real value" when inflation rises [1]. So if you buy a TIP for 100 that pays 2%, and inflation is 8%, the face value is adjusted to 108 and you get a 2.16 coupon. (Super simplified, to the point of being technically incorrect, but framework-wise fine.) [1] https://www.investopedia.com/terms/t/tips.asp https://www.investopedia.com/terms/t/tips.asp
- reedjosh 4y agoThanks! I'll do some more research.