Making Sen$e: Hot TIPS on Where To Invest

BY Paul Solman  May 9, 2012 at 3:47 PM EST

Retirement Plan
Photo by Kick Images via Getty Images.

Readers of this page regularly ask about Treasury Inflation-Protected Securities (see note below), which I’ve long said are my own preferred investment vehicle. Do TIPS still make up more than half the family retirement portfolio, even with negative yields before factoring in the underlying interest rate, which matches inflation? The answer remains a shaky “yes,” as does my reason for doing so: Even though the TIPS fund I use, Vanguard’s bargain-basement VAIPX, is at its all-time high — suggesting it’s time to sell — every other investment in the world seems even riskier.

Making Sense

The reason I bring up TIPS is a review by esteemed economics columnist David Warsh of books by two longtime FsOM$*, Zvi Bodie and Bob Schiller. Anyone interested in economics would do well to read Warsh’s “Economics Principals” column on Sundays. And anyone interested in TIPS would do well to read Bodie’s new book, co-authored by Rachelle Taqqu: “Risk Less and Prosper.

*Friends of Making Sen$e

Editor’s Note: Read Paul’s previous posts on TIPS:

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions