Beginner Investing/TIP Funds


Hello Paul!
I'm thinking about investing in some TIP (Treasury Inflation Protection) Funds. Are these pretty reliable over the long term? I've read a few articles that these could drop if interest rates rises. I would think inflation would eventually go up over time. I'm not sure what to believe. Please help.

Thank you for your question!
  Yes, every investment will have its opponents and proponents. It is always hard to read through all that to find what fits you the best.
  TIPS are very safe investments.  The drawback is that the returns are very low.   The one hard and fast rule of investing is this: The higher the return you are looking for, the more risk you must take on.  If you are a very conservative investor, and are simply looking for a safe place to park your savings and earn a small return (very small), then TIPS work.
  It is true that the price of these could go down. But you are really after the dividend payments for a bond fund, so that offsets the reduction in price. And these are inflation adjusted, as you note.  So, consider TIPS about the safest type of investment you can get.

Here are some good articles I found to learn more about TIPS:

Here is an article about why to  be careful with TIPS funds, and it may be better to buy them directly rather than through a fund:

I hope this helps!

Best Regards,

Paul Henneman
ValuEngine Inc  

Beginner Investing

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Paul Henneman


I can answer any questions on investment strategies. Specifically, my expertise lies in long term investment strategies designed to beat market performance while reducing risk. Not get rich quick schemes, but solid investing strategies. DO NOT SEND ME YOUR HOME WORK QUESTIONS! Over one half of the questions I receive are clearly students in finance or economic classes asking for answers to their homework questions. Most of these come from India. I won't answer them, do your own work. However, I welcome all investors trying to negotiate how to invest in stocks, mutual funds, ETF's, and other investments.


15 years in a leadership role at a financial research company. We sell research to institutions such as Wells Fargo, Fidelity, Thomson Reuters, Bloomberg, Bank of NY, Scotia Bank, and others.

Florida International University, University of Florida

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