7 Ways to Hedge Against Inflation

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Inflation Hedge #5: Dollar ETFs

When inflation strikes, the value of the dollars you hold declines. And when inflation is caused by an increase in the total number of dollars in circulation, i.e., when the Fed ramps up the printing presses, it means the value of the U.S. dollar versus rival foreign currencies also declines.

Fortunately, the falling dollar doesn't have to mean a falling investment portfolio. In fact, a shrewd wager against the greenback can put a lot of green in your pocket. Betting against the buck is easy with the PowerShares DB US Dollar Index Bearish Fund (UDN). With UDN, you get performance that is inversely correlated to the movement of the U.S. Dollar Index. This ETF uses futures contracts on the Deutsche Bank U.S. Dollar Index to achieve its objective, and its contracts are akin to being short the dollar against the euro, yen, pound, Canadian dollar, krona and Swiss franc.

Find out how to profit from the dollar no matter which way it goes.

Next: Getting a Little 'TIPSy'