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by JumpCrisscross 1524 days ago
> no perfect asset like that exists, so it's worse than that

TIPs [1] come damn close. The interest is subject to federal tax, but you're still coming out ahead.

[1] https://www.treasurydirect.gov/instit/annceresult/annceresul...
1 comments
reedjosh 1524 days 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/

Am I mistaken? If so, I'd love to find a way to get guaranteed inflation beating returns.

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JumpCrisscross 1524 days 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

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reedjosh 1524 days ago
Thanks! I'll do some more research.
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