One ETF that may help an investor preserve capital as well as achieve a real return above inflation is Pimco 1-5 Year U.S. TIPS (STPZ). Short maturity TIPS also offer exceptionally low volatility. Unlike intermediate and longer-term Treasuries, STPZ has maintained its uptrend.
The inflationary bear of 1972-1974 eroded more than 50% of the stock market's value. So one shouldn't count on stocks for a textbook hedge against inflation. Metals tend to fare better, with gold being the patron saint. Note: Gold investors can certainly head for the sunny yellow metal shores of iShares Gold (IAU) for that textbook hedge.
There are other means for taming consumer price inflation, however. WisdomTree Commodity Currency Fund (CCX) recognizes the historical benefit of owning the currencies of commodity producing countries. CCX currently has exposure to the Canadian, Australian and New Zealand dollar, the Chilean peso, the Brazilian real, the Norwegian Krone and the South African rand.Finally, as an avid reader of historical fiction, I recall how "The Coffee Trader" by David Liss had an enormous impact on my understanding of financial markets and their origins. It also brought the critical nature of the coffee bean into focus. Simply put, one of the world's most important commodities is coffee. The entire world drinks it. And the bean may very well be a surprisingly robust hedge. The iPath DJ Coffee Total Return ETN (JO) has never been lower in its four-plus-year history, though it may be close to finding a bottom. Manage the risk of additional declines with stop-limit loss orders. Follow @ETFexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.