Inflation. The Federal Reserve Chief and the governors believe it to be the worst of all possible scourges for the U.S. economy. The specter of it looms large as the government throws more and more money at problems like unemployment, mortgages, and bank bailouts. It would seem inflation is inevitable as that money sloshes around in the economy, driving up prices for fewer goods as manufacturers slow or stop production due to lack of demand. So what's an investor to do?

Continue reading Comfort Zone Investing: Investing Options If You're Worried About Inflation

Comfort Zone Investing: Investing Options If You're Worried About Inflation originally appeared on BloggingStocks on Sat, 13 Feb 2010 10:30:00 EST. Please see our terms for use of feeds.

With ever growing uncertainty whether our economy will face inflation or deflation in the months to come given recent government spending, what is certain is that no one wants to see their fixed income lose purchasing power. Unlike most bonds that pay out a fixed dollar amount in interest, treasury inflation protected bonds (TIPs) pay out a fixed amount over the consumer-price index (CPI), making them a popular choice for investor anticipating the economy to experience inflation. If inflation is higher than projected, the government adds to your principal on a TIP and makes up the difference!

Not only does owning TIPs allow one to keep up with monthly bills that are increasing in step with inflation, they are an important asset class to consider when determining an asset allocation strategy. TIPs enable one to further diversify a portfolio. Bonds are ideal for those not able to stomach much risk and TIPs in particular protect one's fixed income from eroding.

Continue reading Inflation worries got you down? Buy TIP, a Treasury Inflation Protected ETF

Inflation worries got you down? Buy TIP, a Treasury Inflation Protected ETF originally appeared on BloggingStocks on Wed, 23 Sep 2009 18:00:00 EST. Please see our terms for use of feeds.

With stock prices near decade lows and fear at generational highs, many market participants are looking for harbors in the storm -- and turning their eye from high risk growth stock opportunities to what are generally more conservative income ideas.

For those looking to broaden their holdings to include yield-generated income, we turned to a dozen leading newsletter advisors who in turn offered a wide variety of income-oriented ETF and fund favorites.

Yes, fixed income holdings have their own risks. But in general, a diversified portfolio -- balanced between stocks and bonds -- has proven a more defensive posture. In addition, the selections in this report are funds and ETFs; as such the investments themselves are diversified among many holdings.

Continue reading Today's best income ideas: A dozen experts look for yield

Today's best income ideas: A dozen experts look for yield originally appeared on BloggingStocks on Fri, 27 Feb 2009 16:35:00 EST. Please see our terms for use of feeds.

The safest money spot I can find: TIPS funds originally appeared on BloggingStocks on Tue, 18 Nov 2008 16:00:00 EST. Please see our terms for use of feeds.

"Like other US Treasuries, Treasury Inflation Protected Securities (TIPs) have virtually no credit risk," explains fund expert Mark Salzinger.

The editor of The No-Load Fund Investor adds, "Unlike other US Treasuries beyond short-term bills, however, TIPs also have no inflation risk." Here, he looks at an EYF based on TIPs.

"Twice a year, TIPs' principal valuis are adjusted upward by the amount of the increase in the Consumer Price Index Urban (CPI-U), thus protecting their holders against increases in inflation.

"The total return of the bond equals its yield plus the change in principal value based on inflation, changes in real interest rates (published interest rates minus inflation) and supply-demand in the market for TIPs.

"TIPs' yields are lower than those of regular Treasury sercurities of similar maturities. That's one of the disadvantages of TIPs.

"The other is that any increase in principal value due to the biannual inflation adjustment gets taxed every year as if it were received income.

Continue reading Fund expert offers tip on TIPs

Fund expert offers tip on TIPs originally appeared on BloggingStocks on Wed, 22 Oct 2008 10:10:00 EST. Please see our terms for use of feeds.

Continue reading The Payday Pinch -- Cutting at the grass roots

The Payday Pinch -- Cutting at the grass roots originally appeared on BloggingStocks on Mon, 02 Jun 2008 16:51:00 EST. Please see our terms for use of feeds.

"In a new paradigm where risk will become a paranoid obsession with investors, a few TIPS make sense for income," says long-standing advisory industry expert Curtis Hesler.

In his The Professional Timing Service, he highlights the role of Treasury Inflation-Protected Securities within a long-term portfolio and reviews two ways for investors to purchases these issues.

"You can buy them in your Treasury Direct account. If you don't have a Treasury Direct account, you can open one at www.treasurydirect.gov. The problem is that so far, you can't open a retirement account - only an individual account. Go to the Treasury Direct Web site and bone up on all the details, especially if you are going to buy them online.

"TIPS work this way. They are U.S. government bonds issued by the Treasury. They are marketable in that you can sell them in the 'after' market. They come in terms of 5, 10, and 20 years. The interest rate on an issue is determined at auction, and they are sold in increments of $1,000.

Continue reading Inflation protection: Tips on TIPS

Inflation protection: Tips on TIPS originally appeared on BloggingStocks on Wed, 16 Apr 2008 11:07:00 EST. Please see our terms for use of feeds.

While I think the ETF industry has become saturated with many products that serve little purpose for almost all investors, a new ETF launched today which I believe actually has some value. For U.S. investors looking for a way to protect themselves against global inflation as well as getting some non-U.S. dollar exposure, today's launch of the The SPDR DB International Government Inflation-Protected Bond ETF (AMEX: WIP) is welcome news. While U.S. investors search for ways to diversify out of the greenback, with inflation starting to rear its ugly head abroad, traditional global bonds funds have become less desirable. With inflation in countries like Australia surging, the ability to get an inflation protected bond is great. With rising inflation expectations, local bonds prices in many of these countries will fall. If that happens then those holding global bond funds, may lose money. This new ETF helps out with that problem.

According to Murray Coleman: " The fund follows the Deutsche Bank Global Government ex-U.S. Inflation Linked Bond Capped Index. In the past 12 months, that benchmark has returned 20.9%. About 12% of those gains were currency related and another 5% was associated with inflation adjustments. Another 2% came from coupon interest payments. Less than 1% came from price appreciation."

Clearly the name of the game here is still currency diversification, but 5% returns associated with inflation adjustments is nice to.

If you are looking to further diversify your portfolio, this new ETF may be for you.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/19/08.

New global ETF for TIPS launched originally appeared on BloggingStocks on Wed, 19 Mar 2008 18:12:00 EST. Please see our terms for use of feeds.

An excellent article appeared in Red Herring written by Alexandra Berzon. In her article, Alexandra describes a recent, albeit small, misstep by Google Inc. (NASDAQ: GOOG) whereby it began placing Google-leaning content tips at the head of search results. An outcry arose and our friends at Google quickly disengaged the "service."

This situation brings two things to the forefront of my thinking. First, why can't eBay Inc. (NASDAQ:EBAY) react in similar timely fashion to its membership outcries when it receives them? Secondly, what does Google's attempt here signal in the realm of content manipulation? Setting aside the eBay angle and the business aspects of Google's decisions, let's quickly address the impending danger of content manipulation.

Continue reading Google Inc.: The invisible hand controlling content?

Google Inc.: The invisible hand controlling content? originally appeared on BloggingStocks on Mon, 08 Jan 2007 15:15:00 EST. Please see our terms for use of feeds.

Giving away free coffee: theft or good for business? originally appeared on BloggingStocks on Thu, 07 Dec 2006 18:15:00 EST. Please see our terms for use of feeds.