Q: Other than buying real estate or gold, how can I harden my portfolio against the coming wave of inflation?

A:   Inflation, it seems, it the top fear of many investors.

The historic level of borrowing by the federal government, many economists fear, will result in the devaluation of the U.S. dollar. If foreign investors with cash stop buying U.S. debt, the concern is that the government will need to print more dollars to repay its debts. That’s a big way inflation is created.

At this point, the fear hasn’t panned out. Investors seeking stability have been eager to buy U.S. debt and have driven yields down on 10-year Treasuries. And while the dollar weakened against several currencies during the summer of 2008, it has defied critics in 2009 by actually strengthening.

So, before I give you ways to protect yourself against inflation, keep in mind that you’re not the only one bracing for inflation. And because inflation is so widely expected, many of the assets investors buy when they’re afraid of inflation have already run up in price. That’s a danger because if inflation ends up being less serious than believed, you might lose money by investing in an asset designed to protect you.

Gold is a great example of this. Back in late February, when investors were most worried about inflation, the SPDR Gold Shares exchange-traded fund (GLD) rose to $97.73. But had you bought into the inflation trade then, you would have lost 8% of your money through mid-May. That may not sound horrible, until you consider you also missed out on a roughly 18% rise by the Standard & Poor’s 500 while you were hiding in gold. So, by fearing inflation, you suffered a 26% loss relative to stocks.

If you understand the risks, but still want to jump into inflation protection assets, you have a few options. The most obvious play would be Treasury Inflation Protected Securities, or TIPS. These special government securities pay a regular amount of interest but then add an additional kicker to compensate you for inflation. You can either buy TIPS directly from the government, or invest in a portfolio of them using the iShares Barclays TIPS Bond Fund (TIP).

TIPS will offer some protection if there’s runaway inflation. But don’t think you’ll be 100% protected. After all, if inflation soars the price of Treasuries will fall, too, which will eat into your return.

Another possibility if you’re very concerned about inflation are commodities. There are countless ways to invest in precious metals and energy through mutual funds, ETFs or even by buying the commodities directly. If you’re worried about inflation, commodities could be a store of value.

But I’m not convinced yet. For one thing, again, it comes down to expectations. Commodity prices in many cases have been bid up already, so if inflation is more tame than expected, you might lose money. Furthermore, commodities don’t generate any revenue or earnings. They just sit there. So when you invest in commodities, you’re betting on the fact that you’ll be able to find a buyer willing to pay more in future for it. Sounds pretty speculative to me.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns. Follow Matt on Twitter at: twitter.com/mattkrantz