You do lose if inflation is way lower than expected. Say it averages 1% over the next 10 years you will have lost out to the nominal investor who locked in 4% nominal that ends up being 3% real.
. The actual question is why would any individual investor buy any bond except an inflation indexed bond. When inflation is low TIPS are still properly indexed. You don't lose anything.
The big difference is that isn’t as massive a loss as if you have unexpectedly high inflation. There’s a classic thread on here about the asymmetric risk of tips vs nominals that discusses the issue.
Statistics: Posted by er999 — Thu Aug 15, 2024 12:36 pm — Replies 71 — Views 2246