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Treasury Inflation Protection Securities

By Terry Savage on November 14, 2022 | Investments

I invested in TIPS in my 401K and added to it earlier this year. I was surprised that my September statement showed a significant loss. Why did this happen when inflation increased?

Terry Says

Did you invest in a TIPS fund, or were you able to purchase individual TIPS bonds?
A lot depends on the maturities of the actual bonds in the funds. As you approach maturity the price of the bonds coincides with the accrued interest. At maturity, TIPs return the adjusted principal or the original principal, whichever is greater.

If you want to know absolutely everything about how TIPS values are calculated, read this article:
https://www.investopedia.com/terms/t/tips.asp

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