What little advice I can offer. From what I've gathered, there is no sure-fire way to protect your capital from constant things such as inflation and wild things such as economic "incidents", for lack of a better term.
I've lately been thinking that some more reliable means would be to own a "wealth-generating" business. Or a few of them in varied industries, to mitigate risk.
Another method that I've also thought about is antique art and possibly high-quality furniture as well. But that would apply in case of a major war-situation, assuming you could even get those physical items to safety.
TIPS open up a can of worms that most people probably don't want to deal with, unless the bonds are held in a tax-advantaged account (such as an IRA). Here's the skinny straight from the horse's mouth:[1]
Form 1099-OID shows the amount by which
the principal of your TIPS increased due
to inflation or decreased due to deflation.
Increases in principal are taxable for the
year in which they occur, even if your
TIPS hasn't matured, so you haven't yet
received a payment of principal.
I.e., you must pay annual taxes on an increase in principal for your TIPS bonds, even though you don't get your cash back from the govt until the bond matures.
No thanks! Count me out of that one!
As a possible alternative (which has its own problems) there are Series I savings bonds (which also attempt to compensate for inflation). Those have the advantage of:[2]
Tax reporting of interest can be deferred
until redemption, final maturity, or other
taxable disposition, whichever occurs first.
My previous reply was critical of TIPS. But I didn't offer an alternative. This is a very complicated issue to deal with; there are so many pluses and minuses to all investments.
But here's an alternative to TIPS: Roth IRA or Roth 401(k). You put your after-tax money in there and then you NEVER have to pay taxes on interest or capital gains. No taxes ever again. Of course that's at the whim of Congress. They can always bend you over 20 years from now by changing the law. TANSTAAFL.
I've lately been thinking that some more reliable means would be to own a "wealth-generating" business. Or a few of them in varied industries, to mitigate risk.
Another method that I've also thought about is antique art and possibly high-quality furniture as well. But that would apply in case of a major war-situation, assuming you could even get those physical items to safety.