While U.S. commercial fishermen once faced "The Perfect Storm,'' investors may soon be facing an epic, inflation-fueled tempest of their own, according to Research Affiliates Chairman and founder Robert Arnott.

Investors may be hit with what Arnott calls a "3-D Storm"-with the three D's standing for deficits,  debt and demographics, which he deems economically unfavorable. On top of all that, Arnott said in his firm's October newsletter, the market environment may also be walloped by the "wealth-eroding effect of inflation."

"Traditional investor portfolios are likely to get caught up in the storm surge of rising prices,'' Arnott wrote.

To survive this impending storm, Arnott suggests investors build themselves a "3-D Shelter''-a financial portfolio made up of developed world equity, bonds and a third pillar made up of asset classes likely to generate superior returns over a full market cycle and longer.

"Can some of these recently battered asset classes that meet this definition fall further? Of course,'' Arnott wrote. "But averaging into the riskier markets, when recent markets have brought them to reasonable valuations, and accepting some downside risk if you're early, is essential to successful asset allocation.''

Arnott advised investors to take a long view and focus on asset classes that are likely to excel over a "3-D" dominated period. However, he says the recent market sell-off is starting to open up opportunities for investors to build the third portfolio pillar.

Among the asset classes he thinks could protect investors against inflation are TIPS, REITs, commodities, local currency emerging market debt, junk bonds, bank loans and convertible bonds.

The bad news, Arnott wrote, is that the threat of a 3-D storm may hang around not only for months, but for years. Consequently, he advised investors to start building their shelter now, while a soft economy serves to divert such a financial maelstrom. The good news, Arnott wrote, is that those asset classes that could serve as the backbone to investors' financial shelter have started to become more attractively priced.

"There may never be a better time to establish our third pillar, using the continued [economic] weakness to embed and reinforce our ability to weather the storm,'' Arnott wrote. "The beach days are over. It's time to get to work-carefully and deliberately-building protection from the great threat to our portfolios."

-Jim McConville