09.28.26 TIPS Vs Bonds / How To Protect Your Social Security Now

So the stock market values, stock market has gone up and up and up and up and up.

There's a lot of people who are worried about what the trajectory for the stock market's gonna be with, uh, extreme federal spending, deficit spending, the debt, inflation, all the factors going on right now.

Uh, it's led to the 10-year Treasury topping five percent, which is a big number in the last fifteen years.

Thirty-year Treasury, higher yet.

Here's the thing.

One of the most confusing things for people is, okay, I know I need to have some money, regardless of my age, in the stock market.

But as I age, I wanna reduce the percent of my money that's in the stock market.

And historically, there was a big thing called the 60/40.

You do sixty percent in stocks, forty percent in bonds.

But at a time of loss of confidence about federal government having its arms around inflation, there's more and more fear owning bond funds because what happens when interest rates rise, the value of your bonds goes down.

It's backwards of what you might think.

So people are like, "What do I do? Do I just take all my money that's not in the market and put it in savings accounts or money market accounts?" Well, there is an alternative that the pointy-headed people in the finance world talk about, but people's eyes glaze over, and it's called TIPS, Treasury Inflation-Protected Securities.

The idea of a TIPS fund or TIPS themselves is you get the rate of inflation plus a return on your money.

So TIPS were kinda ignored for a long period of time when inflation was so subdued, and they're having their moment in the sun again as an alternative to traditional bonds when you're trying to build the lower-risk portfolio because of your age.

Now, if you're younger, being overwhelmingly in stocks or stock funds, I'm all about index funds or ETFs and w- broad market ETFs, exchange-traded funds.

It doesn't matter if the market craters when you're in your twenties, thirties, forties.

Starts to matter more in your fifties 'cause it's all about having time for the market to recover and your money to grow again.

But it is a normal cycle for markets to go through downdrafts, and we are obviously overdue for one.

And Wall Street analysts are always undyingly, uh, optimistic 'cause they wanna...

They want people in the casino.

They want people investing.

Short-term, buying stocks is a casino.

Long-term, it's a smart play.

The problem is long-term.

If you are late fifties and beyond, you need to make sure that your portfolio is more balanced, and that's where the confusion is right now, how to do that with the non-stock side of things.