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NEW YORK (CNN/Money) - How do I protect my stock portfolio from the declining value of the U.S. dollar?

-- Sal Pietromonaco, Albuquerque, New Mexico

Let me start with two observations.

First, I don't think it's a good idea to overhaul one's portfolio to provide protection against any threat, whether it's the weak greenback, rising inflation and interest rates or any other concern.

Seemingly sensible moves will come to naught if the threat doesn't materialize. What's more, you could end up hurting your portfolio's performance if your strategy is too restrictive, preventing you from responding to other developments in the economy and the markets.

Second -- and more to the point -- I'm not convinced that a declining dollar is something U.S. investors need to be protecting themselves against in the first place.

That's not to say a dollar that continues to head south as it has the past three years or so can't cause havoc with the economy and the markets.

When the dollar drops in value, it pushes down the return that foreign investors earn on U.S. Treasury bonds (because they get less of their own money when they convert dollars back to their own currency). To compensate for those lower returns, foreign investors might buy our Treasuries only at higher yields -- and higher Treasury yields would eventually mean higher interest rates on everything from home loans to credit cards.

What's more, by pushing up the cost of imports, a lower dollar could trigger inflation, which could hurt both the economy and stocks.

But none of this is a certainty. The lower the dollar goes, the more attractive U.S. exports become, which could narrow the trade deficit and take some of the pressure off the buck.

Ultimately, I put all this is the "too many variables to figure out the net effect" category, which means I don't think investors should be making dramatic moves of any type to guard against this difficult-to-quantify effect.

Fortunately, though, there are a couple of easy moves investors can make that would help them if the dollar continues to fall -- but that would make sense to do regardless of what's going on with the dollar.

The first is to put some of your money in foreign stocks or, better yet, mutual funds that invest in foreign stocks.

There are a couple of potential payoffs here.

You get additional diversification in your portfolio since foreign shares don't always rise and fall in synch with U.S. stocks.

You get the currency play -- that is, a falling dollar boosts the return of foreign securities owned by U.S. investors (the opposite effect of what happens to foreign investors who own U.S. securities when the dollar falls).

The currency play also works with foreign bonds, but since bond returns are generally lower than those of stocks, a rebounding dollar can wipe out bond returns faster than would be the case with stocks. That's why I'm more a fan of diversifying into foreign stocks than foreign bonds.

You can screen for foreign stock funds with low fees and solid performance at our Fund Screener. There also are a number of good international options on the Money 50, the list of top funds selected recently by Money Magazine.

Inflation-protected bonds, or TIPS (Treasury Inflation-Protected Securities) are another way to go since they would provide some protection if a falling dollar (or anything else) were to re-ignite inflation.

The principal value and the interest payments of TIPS rise as the consumer price index climbs. TIPS are also another way to diversify the bond portion of your portfolio beyond the usual suspects -- Treasuries, corporates, junk and munis.

You can buy TIPS directly from the federal government. Several major fund families including Vanguard and Fidelity also sell TIPS funds, and they're available as an iShares ETF.

A final move you may want to consider is investing a modest portion of your portfolio -- say, 5 percent -- in a mutual fund that tracks a commodity index or invests in or companies, like mining firms and oil companies, that produce commodities. (To find such funds, go to our Fund Screener, choose Sector Funds and then select Natural Resources in the pull-down menu.) The pick in this category on the Money 50 is T. Rowe Price New Era fund (PRNEX).

Again, the theory here is that hard assets like commodities provide additional diversification for your portfolio and a hedge against inflation.

One caveat: commodities have been hot commodities the past couple of years what with China's roaring economy soaking up a huge portion of the world's raw materials and driving up prices. If China falters or investors sour on commodities the funds that have done so well in this area in recent years could take a hit. So exercise some caution.

If you decide to incorporate any of these investments into your investing strategy, remember that I'm suggesting some tweaking here -- not a radical overhaul. By keeping your moves modest, you can benefit if the buck continues its slide, yet still have a portfolio that can fare well even if the pessimistic scenario on the dollar doesn't pan out.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World."