TIP ETF gets slammed

Glen Bradford is trashing the TIP ETF today on SeekingAlpha.com:

Frankly, anyone that thinks buying the iShares Barclays TIPS Bond Fund (AMEX: TIP) is going to protect you from inflation is a joker. If you want to protect yourself from inflation, you have to buy commodities. The problem with TIP is that the way they measure inflation is designed to understate true inflation.

The TIP ETF has had a great run over the last two years.

My opinion: This ETF isn’t useful as a long-term investment, but it can be used for short- to medium-term trades. If you think the TIPS base rate is going to keep falling,  then this ETF makes sense. That’s a risky bet.

My preference is to hold TIPS to maturity — forming a secure basis for my overall portfolio.


About Tipswatch

Author of Tipswatch.com blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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