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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Archie Meeties who wrote (14776)	6/25/2000 12:24:00 PM
From: Ken Brown	Respond to of 15132

Unfortunately, i-bonds use the cpi to gauge inflation. Is it perfect? No, I'd like to see a better cost-of-housing component than they currently use. Are the numbers cooked, as you seem to suggest? I don't think so. Is there a better gauge of consumer inflation available? Not that I'm aware of. Anyone interested can visit the BLS at stats.bls.gov for more information on the CPI. In any case, I think that i-bondss are second rate investments if your goal is to have an inflation hedge. What would be your first choice? What can do better on a risk-adjusted basis (especially, going forward from now)? What other instrument can I purchase that will guarantee me protection of my principal in times of runaway inflation, or deflation? And offer me the ability to modestly grow my principal most times? (And on a tax-deferred basis, in the case of I-Bonds.) I'm not suggesting that anyone should be 100% in I-Bonds or TIPS (not practical anyway, given the tiny $30k/person/yr limit on the former, and the tax consequences of the latter). But I don't believe they should be so lightly dismissed, either. Ken