Duration: The Looming Scandal
IndexUniverse Staff (February 9th, 2010) Writes:
It’s not that bonds are bad, it’s just that they’re misunderstood.
Matt’s right to suggest that investors in BlackRock’s iShares TIPS ETF (NYSEArca: TIP) may not really understand what they’re buying, but he stops short of actually explaining what TIP investors should really be expecting. Let’s take a look at how TIPS (in this case, represented by the BarCap US Inflation Linked Bond Index) has done vs. the Consumer Price Index since the mid-90s. I tossed in a line for the fed funds target just for fun:

There are a few things worth noting.
First, as Matt suggests, in general, the moves in TIPS have little to do with the actual fluctuations in the CPI. That’s not because they’re broken; it’s simply that movements in the bond market have historically
...

![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)


