But every six months, the Treasury adjusts your bond's principal for inflation. And your rate is based on the newly adjusted principal. Or you can buy funds that invest in inflation-adjusted bonds. The traditional refuge for worried investors, utilities also have the power to pass on price increases, says Frank Cappiello, chairman of the Cappiello-Rushmore funds. Real estate funds.
Real estate is a traditional hedge against inflation.
In areas like Boston, New York and San Francisco, they can benefit from tight supply, too, says CGM's Heebner. The best real estate funds are in the chart. Real estate is a traditional hedge against inflation, and real-estate funds have been performing well. Lipper Investing appears Fridays.