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1.
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.
2.
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.
3.
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.
4.
Are stocks in general an indirect way to protect your portfolio from inflation?
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Yes, because 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. Because of this, stocks have traditionally been used for inflation protection.
5.
What is the major reason for stocks being good inflation hedges?
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Their potential for high returns. Their returns can be potentially higher than those of bonds.