Many investors are worried that high inflation means low profits for their portfolios. But that’s not always the case.

Inflation has been pretty mild according to the official statistics for the past several months. In January the wholesale measure of inflation rose 0.1%, and the consumer measure of inflation climbed 0.2%. Both of these numbers were below economists’ consensus estimates, but were up from the average level of inflation in the previous three months.

First of all, there are two major areas that have been impacted the most by inflation — food and gasoline — which I’m sure you’ve recognized whenever you visit a gas station or grocery store. In the last year, grocery prices are up about 5.3%, and gasoline prices are up about 9.7%.

However, when it comes to our inflation index here in the U.S., we’re heavily weighted towards real estate to the tune of about 40% of the Consumer Price Index. And of course that sector and persistent weak housing prices have been weighing down the average for some time now. So the official rate of consumer inflation in the past year is just 2.9%.

As a result, the Fed is able to say that inflation is under control and keep short-term interest rates artificially low. However, when you take real estate out of the equation, inflation is closer to 8%, a whole lot higher than the “official” rates.

Clearly, the seeds of inflation are being planted now. As the U.S. dollar continues to decay due to the Fed’s 0% interest rate policy and aggressive intervention in Treasury auctions, all commodities that are priced in U.S. dollars, like beef, crude oil, cotton, corn, gold, pork, soybeans, wheat, etc., are all destined to go higher.

Investors should get ready for an inflation flare-up in the upcoming months. Traders should watch these numbers closely, but the good news here is that the stock market has historically been a great inflation hedge.

If you think savers are frustrated now with low yields for certificates of deposits at banks, just wait until inflation starts taking a bigger chunk out of their purchasing power. They’ll have no choice but to put their money in the stock market because that is the only place to get yield and the capital appreciation they need to meet their spending requirements.

Now, not many people are happy about inflation — especially when it comes to high gas prices. But that doesn’t mean there aren’t opportunities out there.

One such opportunity to consider is precious metals, as InvestorPlace.com author Richard Band pointed out recently. (Read more here).