What are inflation-protected securities and how do they work?
Inflation-protected securities, like TIPS, are government bonds that adjust their principal based on inflation rates.
How do they differ from regular bonds?
Unlike regular bonds, their principal increases with inflation, providing a safeguard against rising prices.
Are they a good investment during high inflation?
Yes, they can be a good investment during high inflation as they help preserve purchasing power.
What are the risks associated with them?
The main risks include interest rate risk and the potential for lower returns if inflation is low.
How can I invest in inflation-protected securities?
You can invest in TIPS directly through the U.S. Treasury or via mutual funds and ETFs that focus on these securities.
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