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2010: Real Estate or TIPs?

Protect against inflation: REIT or TIPs

  • REIT

  • TIPs

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JEDI

JEDI

Lifer
With $12T in debt for the US, I want to hedge against inflation. I want to devote 5% of my retirement portfolio to this, but cant decide between:

REIT or TIPs?

the problem with TIPs is that it's Bonds. Bonds protect your portfolio when the market goes down. But with all the $$$ that Obmama is throwing around, i predict another up year for 2010. Thus i'm thinking REIT.

Which would you choose? WHY?

.
 
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First off, inflation won't be that bad, so your initial assumption is off. Sovereign debt, by itself, provided GDP keeps up and the debt is used to fund projects of future value, then inflation is kept in check.

Second, TIPS will only expose to more danger, as it's based upon the price of government debt itself, which, even excluding inflation, would go down based upon your worries. I am referring to the risk-spread of course.

Third, REITs aren't out of the water. Vacancy rates are still high and so much of REITs are exposed, as mentioned above, to CRE.

Finally, your attempt to inject political viewpoints is really stupid.
 
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