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by reedjosh
1519 days ago
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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 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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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