Inflation and the Case for Real Assets Story

Inflation and the Case for Real Assets

Inflation is currently top of mind for many investors. With data showing that consumer prices climbed over 7% in 2021–the largest increase in four decades–this comes as no surprise.

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Inflation doesn’t just make it harder to buy groceries or drive to work — it can also do serious damage to your portfolio and make it harder to achieve your long-term investment goals.

Read on to learn more about how inflation impacts traditional investments and why many investors turn to alternatives as a way of hedging against rising inflation.

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Prolonged inflation is bad news for investors. In a traditional 60/40 portfolio, 60% of capital is invested in stocks and the remaining 40% in bonds.

Real assets provide a tried and true hedge against inflation

Within the category of real assets, though, investments vary significantly in terms of volatility, whether or not th ey offer passive income, and how closely correlated they really are with inflation. Read More

Gold

The most common hedge against inflation is gold. Many investors flock to gold becaus e it seems like a reliable store of value and the performance of gold is uncorrelated with the performance of the stock market. Read More

Real Estate

Real estate is another real asset that can perform well in an inflationary environment. Investors with existing reside ntial real estate can increase rents, which allows their income to stay flat or increase in real terms. Read More

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