Sometimes the best strategy is to eliminate all the "wrong" investments. That's what Frank Armstrong, founder and president of Investor Solutions, recommends.
"Two areas that are huge bubbles waiting to burst are gold and long-term bonds," says Armstrong, who has also written "Introduction to the Retirement Challenge: Will You Sink or Swim?"
"Gold is currently priced at record highs, and we've seen unprecedented government intervention in the bond market, which has caused the interest rate to hover close to 0%," he said. "When that finally stops, interest rates are bound to rise."
To hedge against inflation and earn real returns, your best bet is to buy into the global stock market, advises Armstrong.
"The global economy will continue to grow, and the best way to ride that wave is to own a diversified portfolio of companies around the world," he says. "It's not sexy, but buying the market through an index fund works."
Armstrong's pick is the Vanguard Global Equity Fund, which allocates about 63% to foreign stocks, including 18% in emerging markets. The remaining 37% is in American stocks. The fund has climbed 11.4% this year and has averaged an annual return of almost 7% before taxes over the last decade.
NEXT: Global stocks ETFs
