Do you remember the year when a gallon of gas cost just $0.63? Depending on your age, you might not! That year was 1978.

When the prices of goods and services rise in an economy, inflation is often a contributing factor. Inflation can present various challenges, particularly for savers who see their purchasing power diminish, leading to a decreased incentive to save money. Those on fixed incomes can be especially hard-hit. Fortunately, there are strategies to protect yourself against inflation. Here are five methods to consider:

Treasury Inflation-Protected Securities (TIPS): TIPS offer a safeguard against inflation. The principal of a TIPS adjusts with inflation and deflation, as determined by the Consumer Price Index. When a TIPS matures, you receive the greater of the adjusted principal or the original principal. Interest is paid semiannually at a fixed rate. TIPS can be held until maturity or sold earlier on the secondary market, although you may receive less than the principal amount invested if sold before maturity.

Precious Metals Funds: Historically, gold prices tend to rise during inflationary periods as the purchasing power of the dollar falls. As more dollars are needed to buy an ounce of gold, the price typically increases. There are many precious metals funds that invest in gold and silver, with some also including platinum and palladium.

Commodity Mutual Funds: Generally, commodity prices increase during inflationary periods. Consider the corn and wheat that go into making a box of cereal—the rising cost of these raw materials often leads to higher prices for the finished product. Numerous mutual funds invest in agricultural and energy commodities, potentially benefiting from increased commodity prices.

Equities / Equity Mutual Funds: Companies in sectors sensitive to inflation, such as industrials and materials, can potentially benefit in a higher inflation environment. If a company's operations involve producing a commodity, inflation could improve its bottom line. There are specialized mutual funds that include these types of equities in their portfolios.

Real Estate / REITs (Real Estate Investment Trusts): REITs can provide protection against inflation. Real estate values and rental incomes tend to rise when prices increase. For REITs, dividends can be a significant advantage. According to Nareit/October 2019, REIT dividends have outpaced inflation as measured by the Consumer Price Index in nearly every year over the past two decades.

It's always wise to be proactive and have strategies in place for when inflation hits. These assets, among others, can offer diversified protection against the erosion of purchasing power. However, a diversified portfolio does not guarantee a profit or protect against loss in a declining market. All investments carry risks, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

Mutual funds are sold by prospectus. Investors should consider the investment objectives, risks, and charges and expenses of the funds carefully before investing. The prospectus contains this and other information about the funds. Contact your financial professional to obtain a prospectus, and read it carefully before investing or sending money.

If inflation concerns you, please feel free to reach out. I would be delighted to discuss a personalized plan tailored to your individual investment objectives and needs.