Breaking the problem of stagflation into two problems and looking at them seperately might be helpful.  Let's take the problem of a stagnant economy first.  The lead weight on economic growth in the U S and other parts of the world seems to be the credit crisis or the credability crisis in the financial sector.  I see no easy or quick resolution to that problem, but a way for an investor to deal with it might be by investing in cash rich companies that do not need a lot of credit.  Generally speaking, companies that pay dividends usually have strong balance sheets and considerable cash so we might have a clue there. 

Staying ahead of inflation is a must for the succesful investor, but it can be challenging if inflationary conditions deteriorate into runaway or double digit inflation.  We are not there yet so I will continue to expect commodities and/or companies that benefit from high commodity prices to benefit.  Companies like CAT, Deere, POT, CPB & others come to mind.   

There should also be special situations in green tech, emerging markets, and perhaps real estate, but selection of investments will be critical in those sectors. 

The deterioration of the USD has slowed considerably if it has not stopped, so I would not expect the tailwind effect that a falling dollar has had recently on some investments to continue as strong as it has been in recent years. 

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