This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Diversify to Fight Inflation

The argument over inflation has reached fever pitch as investors turn to gold, TIPS and index funds to diversify their portfolios and beat the specter of declining purchasing power. However, if inflation fears are not realized, these three investments still serve as good ways to diversify your portfolio in a difficult economic climate.

Gold has historically been one of the investments of choice for people seeking to hedge against the loss of the purchasing power of paper currency. Shares of iShares COMEX Gold Trust (IAU) and SPDR Gold Shares (GLD) represent a direct investment in the price of physical gold bullion, stored in protected locations. These funds do not invest in equity securities or complicated derivatives -- just the real deal. An investment in IAU or GLD also allows investors to take a stake in physical gold without state of the art security and a giant vault.

Gold prices can be very difficult to predict and many wise traders have chased the gold trade only to buy at the top and sell at the bottom. Investors should choose GLD or IAU as a long-term inflation hedge, not a short-term gamble. If you believe that inflation concerns are unfounded, gold is a good way to diversify your portfolio with an investment that has traditionally performed well when other sectors of the market have done poorly.

Treasury inflation-protected securities are another popular way to steel a portfolio against inflation and iShares Barclays TIPS Bond Fund (TIP) provides a consumer-friendly method for investors to buy TIPS. While the consumer price index is not perfect, it serves as a guide for consumers and the principal investments in this fund.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DIA $181.19 0.00%
GLD $116.16 0.00%
IAU $11.71 0.00%
IWR $173.52 0.00%
TIP $114.14 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs