FYI: I’ve been getting lots of questions about whether Treasury inflation-protected securities (TIPS) are a good investment, with the yield at just 0.32% on the five-year. To answer the question of whether TIPS are cheap or expensive relative to Treasuries, I’ll discuss how to make the determination of whether to purchase TIPS or nominal fixed-income securities. To begin, we need to recognize there are two ways one can hold TIPS and nominal bonds: purchase the bonds individually or invest in mutual funds/exchange traded funds (ETFs). When investing through taxable accounts and IRAs, one can do either. However, in corporate retirement plans, such as a 401(k), one is limited to funds.