 Quote:
|
Originally Posted by Cut-Throat
Well, all of my TIPS investments are in Tax-deffered accounts, so I never payed to much attention to the taxes on them. But in a highly inflationary environment like we had in the 70's, TIPS would be the place to be - I would guess? Is the inflation adjustment taxed as ordinary income and not capital gains?
Where you like to be invested in a highly inflationary environment? Cash?
|
Well, during high periods of inflation you would want to be in short term TIPS. That way you get the advantage of a guaranteed return and at the same time you don't get hammered by interest rate risk like you would in a longer maturity portfolio.
It sounds like you have prett reasonable expectations. If I were you I would ladder them out about 10 years and go tie some more flies. Once a year, remember to reset the ladder and go do some more fishing. As long as you're in a tax deferred account (which you said you were) you don't have to worry about the slightly more complicated taxation of TIPS.
|