TIPS BONDS FAKE INFLATION PROTECTION!

Interest-Rates / Inflation Oct 26, 2022 - 11:05 PM GMT

How to protect one self form INFLATION! Well what the investment industry sold to their clients were Inflation Protected Bond funds! The sales pitch went that when Inflation soars and regular bonds fall don't worry you are protected so given that inflation has taken off like a rocket have these bond funds delivered on their sales pitch?

ishares TIPS Bond ETF

If you go to the ishares website you get this current chart which does not quite tell the true picture.in terms of the magnitude of the recent price drop and failure of TIPS to do what's written on the tin, i.e. protect against inflation.

THIS is the reality of the so called TIPS! A spectacular collapse in price all the way back to levels not seen since 2011! This is why investors need to be wary of the sales pitches that vomit out of fund managers mouths who are nothing more than sales people eager to bank their annual fees by selling investors lemons such as this! Inflation protection they said! Instead investors get a collapse worse than if they had just invested in dividend paying stocks and without the upside of stocks!

The bottom line is that if you wanted to invest in TIPS then steer clear of the funds, invest directly in the actual bonds that have maturity dates, where the longer the date the more volatile the bond price.

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Your watching the British pound burn at the official rate of 10.1% per annum analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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