Real Assets as a Hedge Against Inflation

As real assets are generally not as affected by the volatility of currency or stock market changes, investing in these types of assets can work as a hedge against inflation. They can play an important role in diversifying an investment portfolio, creating steady income, and preserving wealth.

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Real Assets as
a Hedge Against
Inflation
Celestin Pepin

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A
s real assets are generally not as
affected by the volatility of currency
or stock market changes, investing
in these types of assets can work as
a hedge against inflation. They can play an
important role in diversifying an investment
portfolio, creating steady income, and
preserving wealth.
Real estate as a real asset can cover a variety
of properties, all of which can serve as a hedge
in slightly different ways. For example, in the
rental market, rent can be adjusted as prices
rise in the broader economy, which can work
as an effective hedge. In commercial leases,
passing operating expenses to tenants helps
protect landlords’ base rent from inflation-
related losses.
Infrastructure investments can be vulnerable
to economic downturns but can still work
as a hedge against inflation. Long-running
projects can be structured to provide long-
term contractual payments, and regulated
utilities may be allowed to pass on increased
costs to their customers.
Natural capital assets such as energy,
timberland, and agriculture offer effective
inflation hedges, especially amid growing
climate risks. These sectors maintain intrinsic
value and long-term income potential, which
is appealing to investors seeking portfolio
diversification and resilience.
INFRASTRUCTURE
INVESTMENTS CAN
BE VULNERABLE TO
ECONOMIC DOWNTURNS
BUT CAN STILL WORK
AS A HEDGE AGAINST
INFLATION.
Real Assets as a Real Assets as a
Hedge Against Hedge Against
InflationInflation
Real estate as a real
asset can cover a
variety of properties,
all of which can serve
as a hedge in slightly
different ways.

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To learn more about real assets, visit the
blog of Celestin Pepin.