Contrarian guru David Dreman remains concerned about major inflation, and says investors should thus focus on stocks and the housing market.

In a column for Forbes, Dreman says that economic improvements and the realization that higher interest rates will come as the economy improves have driven the stock market’s performance recently. “Currently a one-percentage-point rise in yield for a 30-year bond will reduce its price by 17%. A three-point increase in yield will knock its price down 41%,” he writes. “With financial crisis redux fears finally subsiding, investors are looking for places to increase their capital.”

As for inflation, Dreman says that “if massive amounts of money printing by the Federal Reserve and other central banks around the world ignite inflation, the stock market will be one of the best places to be.”  He notes that German inflation in the 1920s and Brazilian inflation since 1945 pummeled those countries’ currencies but that stocks “in both cases produced gains far ahead of inflation.”

Dreman recommends several index funds that he likes, and says that, aside from stocks, he thinks the best asset may be housing. “If I’m right about inflation, it will provide a very effective hedge that comes with leverage,” he writes. “Mortgages can be gotten with only 20% down, and you can finance the rest at today’s rock-bottom rates. This should enhance your overall return significantly and lighten your tax load.”