Real Assets

Definition: Real assets derive their value from their own intrinsic and inherent qualities.  Examples include real estate and commodities.  We also consider real return bonds (TIPS) as real assets.

Investment Case:   Real assets, as broad asset class are helpful in hedging portfolios, may offer lower volatility than stocks and can address concerns regarding  inflation, currency prices or other macroeconomic factors. 

Cost: The cost for investment in real assets may be the opportunity cost for investing elsewhere.  Some real assets are hard, if not impossible, to gain cost effective exposure to, this leaves a smaller universe of investable real assets to most individuals. 

Applied Academics:  Real assets have measurable diversification benefits but may lack liquidity or the ability to access the entire asset class.   We look at opportunities in global real estate and in inflation protected government securities. 

 

 

Noah Schwartz CFP