Quick Definition

Treasury Inflation-Protected Securities (TIPS) are government bonds that are indexed to inflation, designed to protect investors from the negative effects of rising prices by adjusting the principal value of the bond with inflation.

Examples

• 1An investor purchases TIPS to safeguard their retirement savings against inflation.
• 2A pension fund includes TIPS in its portfolio to maintain the purchasing power of its assets.
• 3During periods of high inflation, TIPS provide a more stable return compared to traditional bonds.
• 4Financial advisors recommend TIPS for clients looking for low-risk investments that keep up with inflation.

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