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Portfolios 406: How to Inflation-Protect Your Portfolio

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1.
Stocks are an indirect way to protect your portfolio against the threat of inflation.
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True. Stocks have the potential for higher returns than bonds, and inflation will take a smaller bite, in percentage terms, out of your future purchasing power.
2.
Treasury inflation-protected securities are backed by _______.
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The US government. That adds an element of safety to inflation-conscious investors.
3.
If you are interested in adding commodities to your portfolio to hedge against inflation, you should first check to see if any of your existing investments have some commodities exposure in them.
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True. For example, emerging markets often have a lot of basic-material producers.
4.
When a TIPS bond matures, what does the bondholder receive?
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The bonds original value or the value adjusted upward for inflation, whichever is greater.
5.
TIPS bonds _______ are regularly adjusted to reflect changes in inflation.
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Principal values. The principal values are adjusted as needed; this, in turn, will affect the interest payments that are made.