Short-Term Bonds. U.S. Treasury debt often rises in price when deflation is present because investors shun risk in favor of safety. Consider Treasury bond ETFs such as iShares Barclays 1-3 Year Treasury (NYSEArca: SHY) or PIMCO 1-3 Year U.S. Treasury (NYSEArca: TUZ).
Short-Term Strategies. Deflation often dings the market as its pernicious contagion effect carries over into the corporate sector and chips away at profits. Inverse ETFs such as ProShares Short S&P 500 (NYSEArca: SH) or Direxion Daily Large Cap Bear 3x Shares (NYSEArca: BGZ) can help you capitalize on the hopefully brief downtrend.
Dividends. Dividends can help keep income coming and your portfolio afloat. Dividend ETFs like WisdomTree Dividend Top 100 (NYSEArca: DTN) or PowerShares Dividend Achievers (NYSEArca: PEY) can give the exposure and protection you may be seeking.
For more information on consumer prices, visit our inflation category.
Max Chen contributed to this article.