Should You Still Be Investing in TIPS or I Bonds To Hedge Against Inflation?

Hi everyone and welcome back to the channel! Should you still be buying I Bonds and TIPS with their current and projected returns? Are their better options for you to make money long term? We go over other options depending on your level of risk. Be sure to leave any questions in the comments below. Otherwise, I’ll catch you in the next one!

* I am not a financial advisor and this video is for entertainment purposes!!

🎬Watch My Recent Videos🎬

🔶RISK FREE Investment For Your CASH In 2023 | High Yield Savings Accounts

🔶First FTX, Now BlockFi… Is Coinbase Next?!? | Is Crypto Done???

🔶Is The Recession Still Coming?!? | Did the Fed Just Pivot?!?

🔶Why YouTubers like Graham Stephan and Meet Kevin Helped FTX Grow! | Collapse of FTX

🔶What Did the Fed Choose? Higher Rates Forever? | Federal Reserve Meeting November 2022

🔶Why I’m Buying a Home in This Market | Housing Market 2022

🔶The Housing Market Crash: It Has Started

🔶What To Do As Interest Rates Rise?? | Housing Market Crash
🔗

🔶Amortization Schedules Made Simple
🔗

🔶Are Stocks Going Up After A Turbulent Week
🔗

🔶What Is Happening With The Housing Market
🔗

🔶What is Quiet Quitting | Why It Isn’t Stopping
🔗

Thanks for watching the video from my channel. I really hope that you find this video to be extremely useful. If you have any questions, please post them in the comments section below. Feel free to contribute your thoughts in the comments area, as this channel is for you guys.

Join the C2 Personal Finance community now. Don’t Forget To Subscribe & Press The Bell Icon to get the latest updates.

#ibonds #tips #cds…(read more)

LEARN MORE ABOUT: Treasury Inflation Protected Securities

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Inflation can be a tricky thing to hedge against, especially for investors looking to protect their portfolios from its effects. Some of the most popular tools to combat inflation are Treasury Inflation Protected Securities (TIPS) and I Bonds, which have long been considered as a reliable way to hedge against rising prices. However, in the current economic climate, the question remains: should you still be investing in TIPS and I Bonds to hedge against inflation?

Firstly, it’s important to understand what TIPS and I Bonds are. TIPS are U.S. Treasury securities that are indexed to inflation, so their principal amount adjusts with changes in the Consumer Price Index (CPI). This means that if inflation goes up, the value of the TIPS also goes up, protecting the investor’s purchasing power. I Bonds, meanwhile, are a type of savings bond offered by the U.S. Treasury that also are indexed to inflation, but feature a variable interest rate that is adjusted semi-annually to keep up with inflation.

Historically, both TIPS and I Bonds have been effective in hedging against inflation. They’ve also been relatively low-risk investments, since they’re issued by the U.S. government. However, the current economic climate has introduced new factors that investors should consider.

Interest rates in the U.S. have been hovering at historic lows in recent years, which has affected the returns on both TIPS and I Bonds. TIPS, in particular, are sensitive to changes in interest rates, as their yields are based on the difference between the rate on the security and inflation. As interest rates have declined, so have the yields on TIPS.

The same is true for I Bonds, which offer a fixed rate of return combined with a variable rate based on inflation. In May 2021, the fixed rate on I Bonds was 0.0%, the lowest it’s ever been. This, combined with a variable rate that may not keep up with rising inflation, means that I Bonds may not be providing the same level of protection against inflation as they have in the past.

Additionally, some experts are predicting higher inflation rates in the near future, which could affect the effectiveness of TIPS and I Bonds as inflation hedges. If inflation rises significantly, investors may need to look beyond these traditional tools to protect their portfolios. In fact, some are turning to assets such as gold, real estate, and commodities to hedge against inflation.

So, should you still be investing in TIPS and I Bonds to hedge against inflation? The answer depends on your individual situation, goals, and risk tolerance. While these securities have been reliable investments in the past, their current low yields and potential vulnerability to rising inflation rates means they may not be the best option for every investor. As with any investment, it’s important to do your research and consult with a financial professional before making a decision.