Dear Bill,

I would be interested in any research you may have done, or are considering doing, to include Treasury Inflation Protected Securities (TIPS) in a portfolio. What portion of a portfolio would you think sensible, what benefit would this provide to SafeMax, etc.

Thanks for all your work – I find it very useful.  J.

Hi J.,

Thanks for your note and your interest in my research.

I am mindful that TIPS can represent a value addition to your bond allocation. The reason I have not included them in my book as they are a relatively recent addition to investment alternatives, and thus do not have a history of returns going back to 1926 as with my other investments.

Having said that, I believe it reasonable to include TIPS in a retirement portfolio, particularly given current concerns about inflation. What should the allocation be? I’m just making a guess, but I would say 20% to 25% of your overall bond allocation could be devoted to TIPS. It might be higher.

I am trying to figure a way to include TIPS in my research.

Best regards,

Bill Bengen