You are a financial advisor working for an investment bank. By empirical analyses, financial analysts of the bank found that both CAPM and APT with a four-factor model hold in your country.

The identified macro factors are term structure (differential between yields of long-term and short-term government bonds), inflation, default risk premium (differential between yields of Baa-rated corporate bond and long-term government bond), and GDP. The first factor (term structure) has negative factor risk premium, and the second factor (inflation) is not priced. The third and the fourth factors (default premium and GDP) are reported to have positive factor risk premiums. You can get detailed information from financial analysts on values of factor risk premiums, factor loadings and (CAPM's) betas of all the stocks available for investment.

Ms. X is a wealthy investor. She has cash of $10 million (in dollars) now, and wants your advice for long-term investment. She is willing to take the overall risk in the stock market, however, she is extremely scared of losing money under inflation from past experience. What specific suggestions do you have for her? You must provide detailed theoretical reasons for your advice. There's no hard limit on the length of your answer, however, make it as concise as possible.