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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (38866)	8/18/2010 11:28:32 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78576

You are 100% correct. TIP does not fully protect from interest rate risk, since the interest rates are not fully correlated with inflation. In other words, interest rate could rise to 6-7% with almost no inflation. On the other hand TIP maturity distribution is pretty even on the maturity scale. So it's not like buying 15 or 30 year bonds flat. :) Short term maturities is a protection against interest rate risk. Again, this is only partial protection and you pay for it with lower yields.