Investors these days are doing an about face when it comes to stocks. bonds, and securities. T.I.P.S., otherwise known as treasury inflated protected securities are a form of securities attached to a specific time frame such as 5 year or 30 year increments. Although their value increases as the years go by, the amount that they are worth is relative to inflation conditions such as the consumer price index. Currently standing at nearly 0.4% for most goods in the agricultural and retail spending sector, the index is tied to the high inflation with rates not seen in a quarter century.
Originally created nearly 3 decades ago as a part of a financial overhaul which allowed mainstream investors to own a slice of treasury pie, they also provided a way to keep interest rates low. Paid out increments occurring twice per yaer, the T.I.P.S. can get quite expensive as they are taxed at regular intervals without receiving full value until they reach full term rates. This is a far cry from their prior worth as these securities have an estimated value of $300 billion dollars with the latest figures. However, as stocks rally and inflation is expected to continue to rise, some investors are in search of a new type of long term investment to diversify their portfolios.
