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At Your Finger TIPS

Get a hold on high inflation rates with treasury inflation-protected securities.

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This story appears in the October 2004 issue of Entrepreneur. Subscribe »

In the world of investing, tips are hot. And they're about to get hotter. Treasury Inflation-Protected Securities, or TIPS, didn't exist eight years ago, and until this summer, they existed only in a single maturity. Some were predicting the death of TIPS altogether as recently as three years ago, with inflation low and Wall Street dragging its feet because unprofitable buy-and-holders were the only ones who seemed to want inflation indexing.

But these days, investors of all stripes are taking another look at TIPS. The amount of money devoted to the newfangled Treasuries has mushroomed in the past 18 months, and mutual funds devoted to inflation indexing began to sprout this year, too. With the market growing fast, pension funds and other large institutional investors are almost sure to follow.

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