Opinion: Deflating the Hype About Deflation

Oil stocks are not as good, but investors could also benefit from owning Energy Select SPDR (XLE), which has among its holdings Chevron (CVX), Exxon (XOM), Occidental Petroleum (OXY) and Anadarko Petroleum (APC).

Another choice is Oil Services HOLDRs (OIH), which holds shares in Halliburton (HAL), Baker Hughes International (BHI) and Schlumberger (SLB).

Gold could be owned efficiently through SPDR Gold Shares (GLD) or PowerShares DB Gold Double Long ETN (DGP); again, both are for more aggressive investors. However, gold is overvalued right now relative to other commodities, especially oil. It may be a good idea to wait for a pull back in gold before buying.

Another way to benefit from future inflation is to take advantage of low-interest rates and lock in long-term financing to buy income property such as apartments in supply-constrained markets that will benefit from future inflation through increased rental rates and higher cash flow to the owner.

Do not believe the hype about deflation. It could be dangerous to your financial health. Right now is the best time to start hedging against future inflation because most people don't believe it's going to happen. Now is the classic time to buy a straw hat in winter, because people are just giving them away.

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