How to grow a nest egg while protecting it from inflation and market drops

By Jeanne Sahadi, CNN

(CNN) — There is nothing more agitating for everyday investors than markets falling out of bed and rising inflation eating away at their wallets.

Certified financial planner Douglas Boneparth offers his best advice for how to quell that agitation with a smart, long-term investment strategy

A reader from Maryland asks: How do I grow the money I have and hedge against inflation and the next market correction?

DOUG: Two things make investors nervous about the future: Inflation eroding their purchasing power, and a market correction suddenly shrinking their portfolio. They feel like different threats, but a well-constructed investment strategy can address both at the same time.

Let’s start with inflation. The best long-term hedge against inflation historically has been owning assets that grow faster than prices do. That generally means staying invested in stocks because they have outpaced inflation over long periods more consistently than almost anything else. Beyond that, assets like real estate and commodities can provide additional insulation, though they have their own risks and complexities.

Now, about market corrections. Corrections are normal. They happen regularly, they feel terrible every time, and they have historically been followed by recoveries. The best hedge against them isn’t trying to time your way out of the market. That’s a game almost no one wins. Rather, it’s having a diversified portfolio that matches your time horizon and risk tolerance, so when the market drops, you’re not forced to sell at the wrong time.

Both concerns point to the same solution. A diversified, long-term investment strategy that you don’t abandon when things get uncomfortable. The investors who get hurt most in corrections are the ones who panic. The ones who stay the course, and better yet, keep investing through the dip, tend to come out ahead.

If you don’t already work with a financial advisor, this is a good time to consider it. Creating a strategy that balances growth and protection depends on your timeline, your income, and how you handle stress when the market is down 20% or more. Those are conversations worth having with someone who can help you build a plan and stick to it.

Tip of the week: Know what your enough is

When it comes to how much money you should save and how you should invest, the best answers are based on your needs, preferences, temperament and timeline.

Sure, it’s good advice for most people to save at least enough in a 401(k) to get their full company match and ideally more than that. But how big your own nest egg should be depends on personal factors, like when you retire, whether you’ll have a pension and how much you plan to spend.

So forget aiming for some nebulous “best.” Instead consider what your own “enough” is and aim for that.

And bonus: If you already find life complex enough, you don’t have to soak yourself in the intricacies of the market and multiple investing strategies to reach your goal. In fact, you may get where you need to go using a simpler approach and sticking with a few low-cost index funds that track market performance over time.

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