A Primer on Treasury Inflation-Protected Securities Would Wimpy Buy Treasury Inflation-Protected Securities?

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A Primer on Treasury Inflation-Protected Securities Would Wimpy Buy Treasury Inflation-Protected Securities?

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Do you remember Wimpy? He was the Popeye’s cartoon character who understood that inflation erodes purchasing power. Wimpy made the famous and oft quoted offer, “I will gladly pay you Tuesday for a hamburger today.” He obviously understood inflation (or maybe he simply didn’t want to pay for his burger). His dollar was worth more today than tomorrow. Wimpy battled inflation with his charm while in the real world, investors buy stocks. Another investment to fight inflation is Treasury Inflation-Protected Securities (TIPS). TIPS can be purchased from the US Treasury or on the secondary market (through brokerage firms and banks). You can also buy mutual funds that own TIPS. What Are Treasury Inflation-Protected Securities? The US Treasury began issuing Treasury Inflation-Protected Securities in 1997. TIPS are quite different t

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