This is your Green Grosser helping you gross green today. Now we will discuss Treasury Inflation Indexed Securities or Treasury Inflation Protection Securities, better known as TIPS. TIPS provide protection against risk when owning a Treasury security. TIPS help an investor have a safe guard from the fluctuations of inflation. TIPS are best used during periods of rising interest rates and rising inflation. The largest risks in holding TIPS are a possible decrease in the value of its coupon and principal re-payment. In case of deflation, the treasury still guarantees that an investor will at least receive the initial par value of TIPS at maturity. In addition, TIPS are fully backed by the U.S. Government and have no credit risk. TIPS are most appropriate for tax-deferred accounts such as IRAs and 401(k)s. TIPS are federally taxable income and an investor does not receive payment until maturity. An advantage of TIPS is the investor receives the full inflation-adjusted principal when a bond matures or is sold. From GreenGrosser.com, this is your Green Grosser with your tip to help you gross green today.
About The Author
I am a Computer Science and Mathematics senior student working as administrator on this site.