Secondary TIPS purchase

I bought some more TIPS. But I did break a basic rule of investing … I bought it before fully understanding it. I suppose I can trust the treasury.

  1. I don’t understand how to value it. It was in secondary market, so has a big inflation adjustment number already, an it had sone accrued interest.
  2. I went by my brokers “yield” number, and I assume that is calculated yield above inflation. It was 1.7-something, so that was the attraction to that particular bond.
  3. I think TIPS go up/down “linearly” with inflation. That is, if inflation goes down 0.3%, both an old TIPS bond (with a large “inflation factor”) and a newly issued TIPS (with inflation factor 1.000) will each go down 0.3%.
    CUSIP is - 912810FS2


Every bond has a yield. Regardless of the coupon, your yield depends on the price you paid. So your 1.7% TIPS yield will apply to the inflation-adjusted principal.

Your TIPS, whether it is fresh out of the gate or old, will come with a specific inflation factor. As you said, they are both adjusted with the same inflation rate.