INVEST IN THE TREASURY AND BEAT INFLATION, TOO

The market for U.S. Treasury securities is actively and highly liquid.  As a new type of security, inflation-adjusted securities may not be as well developed and understood as other types of Treasury securities.  This could result in larger spreads between what a dealer is willing to pay for an inflation-adjusted security and what sellers are willing to sell them for, leading to higher costs for the common investor.  There are still unknowns associated with Treasury inflation-adjusted securities not ordinarily associated with other Treasury notes.  For example, what happens if the structure of the CPI-U index is changed?  But regardless of the uncertainties, there is no doubt that these unique bonds are one of the safest types of investments you can buy.

Having completed this tutorial, you should now be able to explain what a Treasury inflation-adjusted security is, what its characteristics and advantages are, and how it is taxed.