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Economic Commentary

TIPS for Safer Investing

Inflation - a persistent increase in the price level- threatens people’s financial well-being by reducing the purchasing power of money, cutting into the future value of savings, and, when unexpected, lowering the real rate of return on investments. To protect their holdings, people take great pains to find investments whose returns exceed the inflation rate, such as stocks, bonds, and numerous other financial instruments. But when their returns are corrected for inflation, investors often see negative numbers.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Sargent, Kevin, and Richard Taylor. 1997. “TIPS for Safer Investing.” Federal Reserve Bank of Cleveland, Economic Commentary 7/1/1997.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International