TIP - TIPS Performance Could Rival That Of The S&P 500 Over The Next Decade
Summary
- Historical inflation data and the 1940s and 1970s experiences suggest next decade inflation may run considerably above the ~3% that consumers and investors expect.
- Bogle and CAPE models project S&P 500 returns of 4-7% over the decade, with a median of 5.5%.
- The highest real interest rates since 2009 combined with prospects for persistently high inflation for longer suggest TIPS returns of about 5-6% per year in the decade ahead.
- There are risks and a more attractive entry point may be approaching.
- Regardless of what scenario unfolds, TIPS are a useful component of an all-weather portfolio.
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TIPS Performance Could Rival That Of The S&P 500 Over The Next Decade