Investments That Can Help In Times Of Inflation
If you’re worried about possible effects of inflation on your investments, there are Inflation-Protected Securities (IPS). IPS can help offset downfalls that might occur due to inflation. There are several different kinds.
Treasury Inflation-Protected Securities (TIPS): A benefit of a TIP is that the government guarantees timely payment of principal and interest.
Municipal & Corporate Inflation-Linked Securities: A Municipal Security is issued by a government entity. Payments can be a bit lower but will change with the Consumer Price Index. A Corporate Security offers higher yields (adjusted monthly for inflation) but at the cost of greater risk.
Inflation-Linked Certificate of Deposit: Insured by the FDIC, these Certificate of Deposit rates are adjusted annually and tend to produce lower yields than Treasury notes or CDs.
Inflation-Linked Savings Bonds: Savings Bonds are backed by the U.S. government and come with the benefit of being exempt from state and local tax. They are meant to be long-term, but can be accessed after one year.
It’s important to remember that although these Inflation-Protected Securities can help deter the effects of inflation on your investments, they are not without risk. Talk to your Financial Advisor to find out what fits your portfolio and your needs.
Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.