Are Inflation-Adjusted Bonds a good idea?
Yes. David Swenson considers them a separate asset class from regular bonds, and in the past, I’ve recommended them as part of a portfolio when diversifying away from a heavily concentrated position. While in the past I’ve told people to look into I-bonds first, because of recent changes in the program I no longer think they are a good deal, and definitely they are insufficient for a person with substantial assets. Note that Swenson does not consider foreign bonds a separate asset class, unlike inflation adjusted bonds. And corporate bonds are in general not a good bet, since stock holders (who own the company) have a tendency to play games like paying themselves dividends and then declaring bankruptcy so the bond holders get left holding the bag. Very few bond-issuers like Warren Buffett put protections in for their bond holders.
