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5 Things You Can Do Now to Prepare for Rising Inflation

5 Things You Can Do Now to Prepare for Rising Inflation

Gold: No matter what, it's worth something

By John Waggoner, USA TODAY

Commodities funds: Prices of materials rise with other prices

Inflation is, by definition, a period of rising prices — not just for gold, but for virtually all basic materials, such as steel, coal, oil and lead.

Clearly, buying a boxcar full of coal has its drawbacks. And small investors who invest in commodities via the futures markets lose early and often.

But you can invest in commodities via exchange traded funds. These funds typically track a commodity futures index, such as the Goldman Sachs Excess Return index, which tracks 24 commodities.

Be aware that many commodity funds have big weightings in energy — which is fine, if that’s what you want. TheiShares S&P GSCI Commodity fund (GSG), for example, is 67% invested in energy.

Tips:

•The PowerShares DB Commodity index fund (DBC) is a highly diversified commodity fund.

•Consider an actively managed natural resources fund. Two funds that have consistently beaten their peers are Vanguard Energy (VGENX) and ICON Energy (ICENX).


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