If the Federal Reserve has to raise short-term interest rates further to wipe out inflation, the yield on money funds will rise. And the interest you get from your money fund yields will cushion any downdraft in stock prices. You should also consider TIPS, which are Treasury Inflation Protected Securities . That s hard to beat. If you re worried about a deflationary recession, a Treasury note or bond would do the trick.
Bonds make fixed interest payments and become more valuable when prices are falling.
In the Depression, government bonds were your best bet. In 1968, it was a tax hike to finance the Vietnam War. In 1990, it was the Gulf War. True, the country is going through a bizarre political crisis. But there is a president now, and there will be a new one Jan. 20.