to construct an investment vehicle that does more than satisfy just one of these two goals.
These two criteria consist of a short-term goal of being correlated with inflation, and a long-term goal of outperforming inflation.
TIPS — Treasury Inflation-Protected Securities? They are an extreme example, since they do an unparalleled job of satisfying the short-term goal while failing to satisfy the long-term goal.
That’s because, by design, the TIPS yield is pegged to changes in the CPI.
Yet TIPS do a very poor job of fulfilling the long-term goal. In fact, their real yield currently is negative.
Mark Hulbert MarketWatch 16 November 2021