07/28/2022
Protection Against Inflation by Diversification into Private Real Estate
When it comes to protecting against inflation, Private Real Estate also known as an Alternative Investment, is often touted as a solution to combat inflation, and for good reason. Over the long term, real estate has outperformed other asset classes, including stocks and bonds. This is due in part to the fact that real estate is a tangible asset with a relatively low correlation to the stock market. In other words, when the stock market goes down, real estate tends to hold its value or even appreciate.
JP Morgan Asset Management, speaks more to the role of Private Real Estate in ones Portfolio, found in their recent article “Is there a role for private real estate in my portfolio?” written by David Lebovitz, Global Market Strategist at JP Morgan Asset Management.
Private Real Estate typically provides a higher yield than other investments, making it an attractive option for income-seeking investors. Investors seeking higher income yields, should consider that if the stock market starts losing value, high yield debt, will not provide the diversification from stocks investors seek.
There are no guarantees when it comes to investing, but private real estate can help you achieve your goals while hedging against some of the risks associated with other asset classes.
Learn More through the attached JP Morgan Asset Management article “Is there a role for private real estate in my portfolio?”
What has not come into question is whether investors will need alternative sources of income and diversification. As such, it seems increasingly likely that private real estate will be part of the broader investment conversation in the years to come.