Treasury Inflation Protected Securities, or TIPS, have made their way into exchange traded funds (ETFs).

These U.S.-government issued bonds are issued by the Treasury and they are sellable in the "after" market. Designed in terms of 5, 10 and 20 years, their interest rate is determined at auction, and they are sold in increments of $1,000.

The principal is adjusted along with the Consumer Price Index (CPI). If the CPI falls, so does the principal, and vice versa, reports Steven Halpern for Blogging Stocks.

TIPS are a decent investment, with the lowest risk that you can find anywhere. iShares Lehman TIPS  (TIP) and SPDR Barclays Capital TIPS (IPE) are two ways an investor can minimize inflation risk.

For full disclosure, some of Tom Lydon’s clients own shares of TIP.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.