> If someone invested their money in TIPS over the last 30 or 40 years thinking they will be able to buy real estate because TIPS protected them from inflation
Does that change the reality that a 1997 30 year TIPS would have been ineffective at helping purchase what was once a below $100 per square foot home in 1997 that is now $300+ per square foot in most US population centers?
Replace home price change (or land price change) with education price change or healthcare price change. Probably even trades’ worker price change.
If a nursing home cost $x per month in 1997, and you thought putting away an equivalent amount of cash in TIPS will ensure you can afford a nursing home in 2027 or 2037, it’s probably not going to be fun to find out how much they cost now.
It worked great if you wanted to ensure being able to buy electronics, other manufactured goods, and probably groceries. But those are beneficiaries of automation and foreign labor.
3.6% annual return since Dec 2003. 1.036^20=2.0286.
Home prices have more than doubled since then, for a large portion of the US. Source for that is going to Zillow, searching a home in a major metro, and looking at price history.
TIPS have been available less than 30 years.