What are Examples of Real Assets and Their Importance

Investors have several ways to enhance their portfolios. One method attracting attention is investing in real assets. These are tangible assets that include land, property, infrastructure, and commodities.

Real assets offer substantial economic value. They can provide protection against inflation, serving as an effective hedge during uncertain times. For those interested in diversifying their investment portfolios, real assets present unique opportunities.

Unlike intangible assets, which derive their value from contractual rights or abstract ideas, real assets maintain intrinsic worth given their physical nature. This distinct category of asset class is essential in a robust investment strategy.

By owning real assets like real estate or natural resources, investors secure a claim on tangible properties that maintain or potentially increase in economic value over time.

Macroeconomic factors often influence the decision to include real assets in an investment portfolio. Not only do these assets support portfolio diversification, but they also respond differently to market changes compared to traditional financial assets.

In particular, during periods of high inflation, real assets can serve as a stabilizing force. They protect an investor's portfolio from the erosive effects of inflation, while maintaining ownership claims that come with substantial reliability.