TIPs are not a good idea in my opinion because they track changes in the CPI, which is a sham of an index calculated by the government. For the last several years, economist John Williams has been re-calculating the CPI using the early-80s methodology – in other words, not using the imputed rents, substitution effects and hedonic adjustments that have been instituted into the CPI methodology over the last twenty years – and has found that using the original (“real”) methodology inflation has been running in the 5%-6% range for many years now. This also conveniently explains how reported CPI inflation can come in at 3% over several years while the money supply has been expanding at more than twice that rate – because the CPI is government fraud! Recall that with hundreds of billions of dollars in government payments tied to the CPI it’s in the government’s best interest to keep the reported number as low as possible. Each percentage point increase would increase government outlays by billions of dollars per year. I’m not a conspiracy theorist by nature, but the CPI calculation is a total and complete fraud used to placate the masses.

Personally I’m not much into negative real rates of return on my investments. But, if you still like those TIPs, by all means… dig in.