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

To: Investor2 who wrote (6908)	1/20/2012 8:08:36 AM
From: Boca_PETE	Read Replies (2) \| Respond to of 10065

On TIPS in the current low interest environment, future interest rate increases would decimate your investment unless the security were held to maturity. Moreover, unless the security is bought in a ROTH IRA five years or more, the income on the TIPS representing "inflation reimbursements" would be taxed at the taxpayer's Federal tax bracket leaving the investor with a NET amount of such income which is LESS than inflation. thus if an investor in the 30% tax bracket were seeking to hedge for inflation with TIPS, the person would need to generate enough such TIPS INFLATION INCOME to be left with 100% inflation reimbursement after the 30%Tax. P