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The Origin of TIPS, How They Work, and an All Weather Mistake

Inflation-indexed bonds fill an important gap in the fixed income market. Regular Treasury bonds are riskier than they seem – long-term Treasuries fell 60% in inflation-adjusted terms between 1940 and 1981. Minimizing duration is not a solution since real rates for short-term Treasuries have been as low as -9%. TIPS solve these issues by offering a safe bond investment not vulnerable to inflation.
5 Part Series:

Part 1:

Part 2: How to Hedge Inflation and Avoid the Biggest Bond Risk

Part 3: The Largest Arbitrage Ever Documented – TIPS in 2008

Part 4: Debunking TIPS Tax Inefficiency + A Tax Deferred Alternative

Part 5: When TIPS Outperform and How I Invest in Them
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