Tips for Investing in TIPS

Treasury inflation-protection securities beat inflation and stock market volatility.

Folks gearing up for retirement or looking for a little extra income gravitate toward Treasuries because of their safety and dependable payout. Problem is, inflation eats away at the principal you lend to Uncle Sam -- and the bond's real return when you decide to cash it in.

That's where Treasury inflation-protection securities (TIPS) step in. Right now, inflation isn't a pressing factor. But economists and market watchers agree that as the economy shakes off its slump, consumer prices will resume their rise.

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