Key Takeaways Diversification across asset classes remains the strongest defense—no single investment perfectly hedges inflation. Real estate investment trusts (REITs) can hedge inflation, though their behavior can mimic equities during volatile markets. StocksWhen it comes to beating inflation, stocks have one of the best track records. Their data shows that a portfolio mixing stocks, real estate, bonds, and some commodities improves your odds of keeping up with inflation—whatever shape it takes. The smartest strategy is to diversify—combining stocks, real estate, TIPS, and even some commodities so each plays its part.