Originally Posted by OrangeOkie
I noticed a .77 percent return on the current TIPS. I guess the object is not necessarily to make money on your investment, rather to preserve capital?


The advantage of investing in a fund that invests in TIPS is that market forces drive the price up when the risk of inflation is high. Take a look at the 5 year history of VIPSX.

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Even in 2008 it lost less than 3% and then came roaring back. If the U.S. implements the Brazilian plan to erase the national debit (5000% inflation, but with special inflation protected accounts for citizens), money in something like VIPSX will keep up with that inflation and then some. On the other hand, if the economy comes roaring back VIPSX might only return 3% while gold could lose 50% as it must compete with stocks for investor money.