Hard asset

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Hard Assets are investments with intrinsic value such as oil, natural gas, gold, silver, farmland, natural colored diamonds and commercial real estate. Typically hard assets are an excellent inflation hedge.[1][2] In general, commodities/hard assets are negatively correlated to both stocks and bonds. In other words, when stocks and bonds decline, commodities tend to appreciate.[3][4] In addition, during periods of high inflation/negative real interest rates equities and bonds do poorly (see 20% total return over 11 years from 1970 to 1981 for the S&P 500 [5] v. 1,100% increase in oil prices[6] and 550% increase in western Canada farmland prices during same period)[7][8] while commodity/hard assets appreciate in value.

See also[edit]

References[edit]

  1. ^ Commodity Prices and Inflation, What's the Connection? - http://mises.org/story/3018
  2. ^ Marotta Aset Management - http://www.emarotta.com/article.php?ID=234
  3. ^ Hard Asset Investor - http://www.hardassetsinvestor.com/component/content/article/9/434.html
  4. ^ Fields of Gold - http://www.thestar.com/News/Ideas/article/475036
  5. ^ Yahoo Finance - http://finance.yahoo.com/q/hp?s=%5EGSPC
  6. ^ WRTG - http://www.wtrg.com/prices.htm
  7. ^ Stats Canada
  8. ^ Alpha, Beta, and Commodities: Can a Commodities Investment be Both a High Risk-Adjusted Return Source and a Portfolio Hedge? http://www.hardassetsinvestor.com/component/content/article/34/50.html?Itemid=4

External links[edit]

  • [1] Reuters News on Natural Colored Diamond Investing

Category[edit]