TIPS
|
| ||
| Treasury inflation-protected securities (TIPS) are inflation-indexed bonds issued by the U.S. Treasury. The rate of return is adjusted to the consumer price index (CPI) as a measure of current inflation. | ||
|
Additional Comments:
The coupon rate is determined at auction like other Treasury securities, but have a yeild generally lower than T-Bonds or notes.
The advantage to TIPS is that you are generating a real rate of return because the coupon rate is adjusted to account for inflation. This protects the bond holder against the negative effects of inflation over the term of the bond. TIPS are currently offered in 5-year, 10-year, and 20-year maturities. TIPS have an active secondary market as well, and in periods of low interest rates and/or expectations for increasing inflation, these bonds can be very popular. |
Related Terms: | ||
Treasury Bond U.S. Treasury bonds, also known as long bonds, are issued in 30-year terms.The T-bond is ... Treasury Note Treasury notes are issued in terms of 2, 3, 5, 7, and 10 years. T-notes, ... Treasury Bill The Treasury bill, or T-bill, is a zero coupon bond issued for terms of one month ... | ||
« View the Stock Market Dictionary »
Latest Financial Advice
- Index Fund vs Mutual Fund
- Roth IRA Tax Guidelines
- Impact of News on Trader’s Psychology and Market Trends
- Overconfidence Bias in Stock Trading: A Critical Analysis
- Mastering Mindfulness Practices for Traders
- Impact of Market Volatility on Individual Psychology
- Leveraging Intuition in Stock Trading: A New Approach
Free Investment Advice
| Get free stock market tips and investing advice by subscribing to our newsletter: |
* Your information will not be shared or sold. |
Recommended Reading
Categories
- Trading Basics
- Investing 101
- Investing Essentials
- Understanding the Risks
- Beginning to Trade
- Trading Strategies
- Trading Psychology
- Retirement Investing
- Personal Finance
- Advanced Trading
- Penny Stocks
- FOREX Trading
- Commodity Futures
- Stock Tips
- Going Public
- Real Estate
- Research Tools
- Stock Spam
- Reviews
- Stock Market Dictionary
RSS