Professor gives an investing tip: TIPS

The financial services sector and advisers are steering their baby boomer clients in the wrong direction, claims Zvi Bodie, a professor of finance and economics at Boston University’s School of Management.
Speaking at the Retirement Income Industry Association’s annual conference in Boston, Mr. Bodie came out against the financial services industry’s conventional wisdom that people in their 50s should be in balanced portfolios that contain a substantial equity allocation.
Mr. Bodie believes that advisers and industry leaders must be prepared to offer solutions for clients who are averse to risk — particularly those individuals who are age 55 and older.
In his opinion, these investors should buy Treasury Inflation-Protected Securities. Mr. Bodie said all of his investible funds are in TIPS.
“Retirement saving and investing is all about ensuring” principal, he said. “It’s not about speculating, in my judgment.”
Mr. Bodie admits his ideas will not win him friends in the asset management business.
“I have to say that, in general, the investment industry regards me as a gadfly, if not an outright enemy,” he said. “If everyone took the safest path, there’d be no money to be made in investment management. Assets under management would be very low.”