Inflation is likely to rise in 2021—but will the rise be sustained? That seems to be the million-dollar question lately.

Given concerns that inflation will rise in the years to come, some investors may be looking for ways to protect their portfolios from its effects. Treasury Inflation-Protected Securities, or TIPS, are a straightforward investment that can help your portfolio keep pace with inflation, but today’s negative yields mean that total returns are likely to be low. Meanwhile, other types of investments have outperformed inflation over time, but often with a lot of volatility and more risk.

Below we’ll go over the recent inflation trends and provide a look into different inflationary environments to explore how various investments have performed over time.

Inflation and inflation expectations are on the rise

The Consumer Price Index (CPI) rose 2.6% in the 12 months ending in March, and the next few monthly readings are expected to be even higher. Given last year’s pandemic-driven drop in prices, inflation readings over the next few months are expected to be high due to the “base effect,” or the impact of having a very low rate at the beginning of the period being measured.

Inflation isn’t just a concern due to the base effect, however. Sometimes inflation measured by the CPI doesn’t accurately reflect every consumer’s experience. For instance, if more of your budget is focused on shelter or health-care costs, it’s possible that the rate of inflation on your basket of goods is higher than the headline index.

Inflation has risen faster on some items than on others

Source: Bloomberg, using monthly data as of 3/31/2021. US CPI Urban Consumers SA (CPI INDX Index), US CPI Urban Consumers Medical Care SA (CPUMTOT Index) (CPSCTOT Index), US CPI College Tuition & Fees SA (CPIQCTFS Index), US CPI Urban Consumers Shelter SA (CPSHSHLT Index), and US CPI Urban Consumers Food SA (CPSFFOOD Index).

According to economist forecasts, the CPI is expected to rise by 3.2% year-over-year in the second quarter of this year, before dropping modestly to 2.6% by year-end. Investors’ expectations for inflation are rising as well—according to the most recent poll by the University of Michigan, the one-year expected inflation rate jumped to 3.4% in April, its highest reading since 2014. Intermediate-term inflation expectations over the next five to 10 years are tamer, at 2.7%.