[Verse 1] Meet the zero-coupon, stripped and lean No payments flowing in between Bought at discount, deep below Watch it compound as years go slow From sixty cents to dollar's face Time builds value at steady pace [Chorus] Zero pays nothing till the end TIPS adjust when prices bend Discount bonds and inflation shields Two special ways that money yields Zero pays nothing till the end TIPS adjust when prices bend [Verse 2] Treasury strips cut coupons away Pure duration is what you pay Sensitivity magnified When interest rates shift side to side Thirty years of patient wait For principal at maturity date [Chorus] Zero pays nothing till the end TIPS adjust when prices bend Discount bonds and inflation shields Two special ways that money yields Zero pays nothing till the end TIPS adjust when prices bend [Verse 3] TIPS protect from rising cost When inflation gains are lost Principal grows with CPI Semi-annual interest multiplied Real returns stay guaranteed Purchasing power what you need [Bridge] Phantom tax on zeros bites Imputed income ignites TIPS create deflation floors Never less than par it soars Two extremes of bond design Discount deep or inflation line [Chorus] Zero pays nothing till the end TIPS adjust when prices bend Discount bonds and inflation shields Two special ways that money yields Zero pays nothing till the end TIPS adjust when prices bend [Outro] Stripped of coupons, indexed bright Special bonds for different sight Choose your path through market change Zero simple, TIPS arrange
← Fixed-Rate vs. Floating-Rate Bonds | Bond Provisions: Calls, Puts, and Sinking Funds →