The risk of inflation may seem minuscule now, but Obama's stimulus program could well have inflationary effects - and turnarounds can be sudden. Treasury Inflation-Protected Securities (TIPS) are terrific insurance against that risk because their principal is pegged to consumer prices. TIPS that mature in two years have a real (inflation-adjusted) yield of about 1% - not bad nowadays - and will leave regular Treasuries in the dust if inflation heats up. You can buy TIPS through the
Vanguard Inflation-Protected Securities Fund (VIPSX) or from the feds (
treasurydirect.gov).
--George MannesNEXT: Best cheap flight finder
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