Inflation is the monster in the closet for many investors, and that's why Treasury inflation-protected securities (TIPS) are objects of great interest lately. The government-guaranteed bonds are designed to beat inflation year after year, so they provide a measure of portfolio protection against rising prices — but they are no panacea, and they take some figuring out.
Still, they may be worth a look, as the worry over rising prices is palpable these days. According to the University of Michigan's April consumer confidence survey, Americans believed that inflation would average 6.5% over the next 12 months. That's the highest reading since 1981, and it's well more than twice the 2.4% rise in the consumer price index (CPI), the government's main inflation gauge, over the previous 12 months.
