With the global economy in recession, central bankers around the world have unleashed unprecedented quantitative easing and loose monetary policy, all in an effort to contrive a sustained recovery after the worst economic and market crisis since the Great Depression. This campaign for growth has culminated most recently in the European Central Bank and the Fed committing to open-ended bond purchases to keep nominal interest rates low.

While they’re welcomed by the risk asset markets, these efforts to stimulate the stagnant global economy have also reawakened investors’ worry about inflation, and caused a grab for Treasury Inflation Protected Securities (TIPS). With this increased investor demand, most short- and intermediate-term TIPS maturities now trade at a negative yield, and on October 18, a Treasury auction of 30-year inflation-indexed bonds sold at a record low interest rate of 0.479%!

At these steamy levels, one has to wonder if TIPS are the best way to protect a portfolio against inflation. After all, interest and inflation rates do not necessarily move in unison. With economic growth stagnant, inflation could remain low, yet interest rates could still rise, especially since today’s absolute low level of yields are the artificial result of Fed actions, or else overextended risk aversion due to the market crisis.

Just like the prices of nominal Treasury bonds, TIPS’ prices are affected by how much income—in this case, the real yield—they are going to throw off over the course of their existence. If nominal Treasury yields rise with inflation spikes, TIPS will be protected because of their Consumer Price Index adjustment. But if nominal yields are driven higher by rising real yields, then TIPS bonds will be much more vulnerable. In that scenario, they might beat standard Treasurys, but not many other asset classes.

TIPS could also disappoint investors expecting a surge in value if inflation meaningfully accelerates, especially if a hyperinflationary environment sets in. In that case, inflation would move too fast for adjustments based on published changes in the CPI, and TIPS would fail to keep up. There’s also a popular suspicion that the CPI can be manipulated by politicians. Behind that conspiracy theory, there is a reality: As recently as 2011, lawmakers indeed talked about a new calculation for the index that would take into account the fact that purchasing behavior shifts when prices change.

In such cases, the CPI no longer measures the price of a fixed basket of goods but instead reflects consumption: i.e., because people drive less when gas prices rise, the weighting for gasoline in the CPI calculation would decrease. The idea was politically appealing because it would reduce the deficit without officially raising taxes or cutting entitlement programs. Lawmakers never made these changes, but the risk that it could happen means TIPS are imperfect as a sole allocation for inflation hedging.

TIPS might then be a good backbone for inflation protection in a portfolio, but they should not be the only choice. Commodities, real estate, high-yield bonds, floating-rate debt and dividend-paying stocks also offer varying measures of inflation protection. All are imperfect by themselves, but when used together, they offer a solid defense, plus the opportunity for meaningful total return that TIPS lack, especially at current rates.

For example, commodity investments are a particularly effective inflation hedge in periods when energy, agricultural and raw material costs are rising (but before they flow through to traditional measures of inflation such as the CPI). Commodity investments, whether they are made through futures contracts or through the stock of companies involved in hard assets, will tend to reflect up-to-the-minute changes in markets’ perceptions of the costs of food, energy and other raw materials. However, for better or worse, commodity prices can be volatile, varying with economic growth, technological developments, new discoveries, weather, geopolitical risk and other changes to supply-and-demand dynamics over time.

While gold fits under the broad heading of commodities, the precious metal enjoys a unique status as an alternative currency in its role as a reserve asset held by world central banks. Gold can therefore perform double duty: as a hedge against the declining value of paper money but also against uncertainty generally. Accordingly, gold can be an extremely effective portfolio diversifier in inflationary scenarios accompanied by political or economic uncertainty, or when the inflation outlook itself is highly uncertain.

A strategy along the same lines is to invest in the foreign currencies of well-managed, fiscally responsible nations. As inflation devalues the greenback, currencies from those nations keeping inflation in check should become more valuable. Investors have often targeted the Swiss franc in these scenarios, or, using the commodity theme as well, taken currency positions in nations such as Australia, Norway and Brazil that are rich in natural resources.

Real estate investments, either private or public, offer another attractive avenue, since the rents (and thus cash flow) of the underlying properties can increase during inflationary periods. History shows that REITs and real estate investments generally tend to perform best as an inflation hedge in periods when inflation is rising at a steady but not rapid clip (less than 5% annually). This performance reflects the gradual pace at which rents may be adjusted higher over time as the underlying leases expire and are renewed at higher rents.

In a very low growth environment, high vacancy rates can reduce the effectiveness of that hedge, as can high valuations in an overheating real estate market. Also, the relatively high dividend yields of REITs in particular make them—like bonds—sensitive to changes in prevailing interest rates. When interest rates rise, as one would expect in an inflationary environment, investments with fairly stable yields are comparatively less attractive and are at risk for price declines. Given this risk, public market REITs may be overdone, especially given their outsized relative performance in recent years. The better play may be in private real estate investments, especially since cheap financing can lever the returns available.

Back in the bond realm, floating-rate fixed-income investments, whose coupon payments adjust for changes in short-term interest rates, can be very effective in inflationary periods simply because the payments are structured to capture the tide of rising rates. While high-quality floating-rate notes are a strong core option, lower-credit-quality bank loan investments are especially effective because of their higher income kicker, though they should be purchased in measured amounts given their risk. Likewise, high yield and emerging market bonds, which have fatter coupon payments, are less affected by inflation and movements in interest rates. Instead they tend to trade on default expectations and capital market conditions. Convertible bonds fall into that same subset for similar reasons.

Global stocks can also be positioned as an effective way to loosen a portfolio’s ties to the greenback—specifically, global companies and industries with real pricing power that can pass along higher input prices to their consumers. Another great inflation fighter that advisors should consider is a portfolio of large-cap dividend-paying stocks. From 1975 through 1980, inflation was as high as 14.4%, but it was trounced by the shares of these large, dividend-paying companies, which gained nearly 38%. The key point here is to focus on quality companies with rising earnings and dividends that will deliver sufficient income growth to provide an inflation-adjusted stream of income while also delivering capital gains in the process.

Ultimately, all of these “inflation hedges” are subject to market forces, which means that capital is at risk, especially in the short and intermediate terms. But relying on one instrument like TIPS is a simplistic strategy that is unlikely to win the best results for clients. So advisors should consider a more comprehensive, diversified approach, using not just TIPS but commodities, currencies, real estate, fixed income and global equities for a full-fledged assault. This way, portfolios are not only leveraged to a payout in the CPI, but also to growth in the economy and capital markets.

Michelle Knight, is Chief Economist and Managing Director of Fixed Income at Silver Bridge (www.silverbridgeadvisors).