If you're investing with 10- or 20-year time frames, I believe stocks are the best game in town.

Having said that, there are instances when investors need to balance their stock portfolios with other investments. One interesting way to generate income in a portfolio are TIPS - Treasury inflation-protected securities.

TIPS give you the income of bonds with the inflation protection lacking with ordinary bond investments.

Here's how they work: Your purchase of a TIPS (they can be bought directly from the Treasury) comes with the guarantee that the government will make up for any lost purchasing power due to inflation. Thus, if the Consumer Price Index rises, say, 2.5% a year over the time you hold the bond, the Treasury will pay you that much extra on your principal when it matures. This differs from an ordinary bond, which pays back only the face amount upon maturity.

Two things are important to understand when considering TIPS. First, the yields on TIPS are lower than the yields on similar-maturity Treasurys. This yield gap takes into account the inflation protection.

Second, you have to pay income tax each year on the inflation adjustment to your principal, even though you won't get the actual cash until the bond matures. Thus, TIPS are best held in tax-deferred accounts.

To learn more about TIPS, check out the Bureau of Public Debt's Web site - www.treasurydirect.gov/sec/seciis.htm.