Quote:
Originally Posted by jyl
The point is that if inflation in the future is expected to be 5%, the TIP bond today will be priced (high) based on future payments consistent with 5% inflation. So you don't get any especial return for buying it. The only way you make an especial return is if future inflation is expected to be 5% but it actually turns out to be higher, say 7% (numbers as examples only). So, do you feel able to forecast future inflation better than the professional investors whose bidding determines TIP prices?
|
Thanks John... I have a tendency to over-complicate things!
