Inflation-Protected Security (IPS)
Contents
Demystifying Inflation-Protected Securities (IPS): Safeguarding Investments Against Inflation
Inflation-Protected Securities (IPS), often referred to as inflation-indexed investments, offer investors a shield against the erosive effects of inflation on their fixed-income assets. Dive into the realm of IPS to understand how these bonds guarantee a real rate of return by adjusting for changes in prices due to inflation or other external factors.
Understanding Inflation-Protected Securities (IPS)
Explore the intricacies of IPS, which primarily invest in debt securities whose bond principal fluctuates in response to inflation rates. Learn how the U.S. federal government issues Treasury inflation-protected securities (TIPS) and Series I savings bonds, while private sector companies offer corporate inflation-protected securities (CIPS) to safeguard investors' principal and income streams.
Shielding Fixed Payouts from Inflation
Discover how fixed-income assets like pensions, Social Security, and certificates of deposit (CDs) are vulnerable to inflation's impact, potentially diminishing the value of payouts over time. Uncover strategies to mitigate this risk and ensure that investments maintain their purchasing power in the face of inflationary pressures.