The cloud hanging over many investment plans is inflation. Recession and financial meltdowns were the concerns over the past year. But with a recovery looming,  high net worth investors are sure to be thinking about a return of high inflation as a real possibility.

Certainly investors have learned to thirve in periods of moderate inflation. But commodity prices have recently begun to rise steadily. In addition prices of other goods that have been kept low for so long in many areas of the economy are expected to rise. What's more, government spending is at record levels. So now investors have to look for ways to form some protective shield around their portfolios.

"Runaway inflation is not a good thing. This scenario makes it very difficult for businesses to plan, since prices are rising so quickly it is hard to make long-range decisions. This introduces uncertainty-and since investors don't like big question marks, stocks tend to underperform during these periods (like in the 1970s),"observes Ben Warwick, chief investment officer of Quantitative Equity Strategies LLC in Denver, and Memphis-based Sovereign Wealth Management, Inc.

Here is how he would approach an inflation-protective investment strategy, as he wrote in Wealth Manager.

Add stock. Equities are considered effective hedges against inflation. "Increasing high beta holdings, including more large-cap and tech stocks in the mix, makes sense as inflation rises."

Add variable rate securities. Since interest rates tend to rise with inflation, expanding variable rate exposure is a good way to go. Consider Treasury Inflation Protected Securities (TIPS). These government-backed bonds pay a coupon interest rate that is directly pegged to changes in the consumer price index (CPI), a direct measure of inflation.

Increasing credit exposure. Treasuries typically lose ground in rising rate environments. "A good alternative is high quality corporate debt, which benefit as companies can benefit from an improving overall economy."