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My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least $1 million.

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The New Inflation Hedges



This Forbes article discussed several ways to mitigate inflation risk:

TIPS (Treasury Inflation Protected Securities)
Pro: Interest and principal track inflation
Con: Phantom tax

CPI Futures (from Chicago Mercantile Exchange)
Pro: Most direct bet on inflation
Con: Most vulnerable to losses

Inflation-Hedged Mutual Funds (available from Vanguard, Fidelity, etc.)
Pro: Professional management
Con: Fees may hurt

Corporation Inflation-Linked Bonds (from Household Finance, etc.)
Pro: Coupon adjusts monthly
Con: Principal frozen

Let me add one:

I-Series Saving Bonds (details)
Pro: Interest and principal track inflation; no phantom tax; no fee
Con: Only adjusts semi-annually

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