The coronavirus pandemic has led investors to rethink their investments. The environment has changed, creating new risks and new opportunities.
We believe real assets, such as commodities and real estate, are appealing now.
When combined with a mix of traditional stocks and bonds, we believe real assets can help in 3 areas:
- manage risk
- protect against inflation
- potentially enhance returns over time.
Real assets provide the framework and resources to facilitate everyday activity in the world economy. While numerous types of investments could be considered real assets, we focus on two:
- Commodities are the goods and raw materials used in the global economy, such as agriculture, meat, metals, and energy. They impact our everyday lives.
- Real estate are land and properties including apartments, offices, warehouses, stores, etc…
We believe that real assets are poised for a bull market.
The chart below shows that after years of under-investment and disappointing returns, commodities seem to have turned a corner and started turning up since mid-2020.
Source: StockCharts.com, Reuters/Jeffries CRB Index, 10-year chart.
Investing in real assets, such as commodities and real estate, comes with risks and benefits.
In our opinion, real assets can help generate competitive returns and hedge against inflation in the current environment. For these reasons, we believe commodities and real estate can be an important part of a balanced portfolio.
Ultimately, whether investing in real assets is wise for you, depends on your financial goals and circumstances.
We are here to help. If you would like to discuss whether real assets are right for you, please contact us.
For more information, please contact Steve Tuttle at 800-390-2755 or firstname.lastname@example.org.