In response to yesterday's blog post about whether you should be worried about inflation, we heard from readers who wanted to know what inflation meant for their investments.  What kinds of investments usually prosper during an inflationary period and which don't?

So let's look at major types of investments and what inflation usually means for each.

Stocks:    Mixed bag. Some companies will thrive during inflation…some in the natural resources area, for example. Other companies who have to pass along higher costs to consumers will  not be as fortunate.

Bonds: Generally not a favorable scenario as fixed interest payments and principal lose value in an inflationary environment.

Gold:  Generally favorable price movement during inflationary periods.

Real Estate:   Real estate prices often increase in inflationary periods, but the current real estate problems are so overwhelming that this time may truly prove different.

Commodities:   Prices usually go higher.

TIPS (Treasury Inflation-Protected Securities):  These principal on these government-issued bonds grows with rising inflation.

As we said, we don't think inflation is a short-term worry, but there is still plenty to worry about in today's stock market.  Make sure you are sticking to the basics and following our 10 simple rules of investing success. 

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