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Mark Hulbert: Meet the Rodney Dangerfield of retirement investing

TIPS have become the Rodney Dangerfield in retirement circles: They are getting no respect.

That’s because TIPS—Treasury Inflation-Protected Securities—have produced disappointing returns in recent years. In contrast to regular Treasurys that carry no inflation protection, and which have been steady—if unspectacular—performers over the last five years, TIPS have struggled to not lose money.

Many retirees therefore are giving up on TIPS in favor of regular Treasurys. Before you do so as well, however, you need to understand what TIPS can offer. I say that because many of the criticisms of TIPS reflect a fundamental misunderstanding.

In essence, TIPS provides insurance against unexpectedly high inflation.

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