FYI: It’s been about three months since I last looked at the merits of owning Treasury inflation-protected securities (TIPS) versus nominal bonds. With that in mind, I’ll discuss how to determine whether to own TIPS or nominal fixed-income securities.
To begin, we need to recognize there are two ways one can hold TIPS and nominal bonds: Purchase the bonds individually or invest in mutual funds/ETFs. When investing through taxable accounts and IRAs, one can do either. However, in corporate retirement plans, such as a 401(k), one is limited to funds.
Regards,
Ted
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