Inflation-Indexed Bonds, TIPS, Savings Bonds, and any investment that will retain it’s value with inflation over the long-haul is what the shaky, conservative investor, concerned about Chained CPI, greater taxes for the middle-class, and smaller Social Security payments when they retire should look into.
And I suppose gold. SInce nations seem to be re-patrioting their supplies. But there is a substantial question as to whether this can be used as money.
Americans may all have to deal with Chained CPI, C-CPI-U, and whatever other letter from the Alphabet the Department of Labor Statistics, and AARP decides to use when quantifying the rise in a consumer’s cost of goods. And citizens of countries around the world all have to worry about their countries debt.
Here’s a link to the latest CPI information from the BLS. Over 80,000 goods and services are tracked monthly by the BLS to determine the fluctuation in cost. Notice the graph of inflation on page 3 during the Great Recession of 2007-2009.
There’s a spike of 6 percent during the first part of 2008. An increase that high is enough to knock anyone’s budget off. And for most of us it did. With the above investments, you can hedge your bets against lower Social Security payments and those hags inflation, and deflation. Should they occur.
Inflation-Indexed Bonds, are what they sound like. A Bond that pays interest on an inflation-adjusted principal amount. And since it’s a Treasury note, it’s backed by the full faith and credit of the U.S. Government.
TIPS, or Treasury Inflation Protected Securities, are the same kind of beast. The principal increases, or decreases with inflation or deflation. Interest payments are made twice a year, and when it matures, you are paid the principal, or adjusted principal. Also backed by the full faith and credit.
Savings Bonds can be bought in payroll checks, are redeemable at banks, can be bought in denominations of $50, to $10,000, and are non-transferrable. Since World War I they have been issued. First, as Liberty Bonds, and have become a stable way of financing a nest egg. To get the most value from them, since they are issued for half the face value, it is considered best to hold them for the full time. Maturity brings the greatest value.
Gold is pretty to look at, hard to accurately quantify, and in Ancient Mesopotamia was considered less valuable than Silver. Which signified Wisdom. So you decide on that one.