Inflation Isn’t Dead, Just Sleeping – And TIPS Can Protect You When It Awakens
July 06, 2010 at 06:00 AM EDT
Investors are always on the lookout for hot tips. The best tips highlight investments that pack a big potential profit punch, but that haven't yet started their move. That's just what we have for you here. We're not talking about the "inside scoop" on some obscure stock. What we're referring to are government-backed "TIPS" - or, as they're more formally known, Treasury Inflation-Protected Securities . Admittedly, inflation hasn't been a major concern of late. The U.S. Consumer Price Index (CPI) was actually down by 0.2% in May, extending a 0.1% drop in April, while May's core inflation - which is the CPI measured without the volatile food and energy components - was just 0.1% higher. That's why many market analysts and media pundits are now saying deflation is much more of a worry for U.S. markets than inflation. However, many of Money Morning 's top experts - including Chief Investment Strategist Keith Fitz-Gerald and Contributing Editor Martin Hutchinson - disagree with that assessment. Recognizing the inevitable inflationary impact of increasing deficit spending , growing federal debt, rising state and local taxes and a weakening U.S. dollar, they see renewed upward price pressure not too far down the road. That makes this the perfect time to learn about TIPS and how they can protect you when inflation again rears its ugly head.