Strategy Intermediate: How to Inflation-Protect Your Portfolio

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1.
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.
2.
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.
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.
If you want to add commodities to your portfolio to hedge against inflation, a good rule of thumb is to limit them to _______.
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5-6%. Because they can be volatile, consider keeping them limited, especially if you are retired.
5.
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.