What and When are the time constraints for bonds?

Is now a good time to invest in TIPs bonds?

  • I'm looking at investing in a TIPs mutual fund, and was a little confused about it. Bonds are expected to decrease because of rising interest rates, but inflation is expected to increase making TIPs more attractive. How do these factors affect TIPS bonds? More specifically, I'm looking at mutual fund ticker VIPSX. Thanks!

  • Answer:

    What's your investing time horizon? If you expect higher inflation in the future, that's the only reason to invest in TIPS. ALL bonds are adversely affected by rising interest rates - the longer the term (maturity), the greater the sensitivity.

Neel P at Yahoo! Answers Visit the source

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