Why Should I Invest in Hard Assets?

The US bill has dropped ninety-seven percent in its value since the development of the Federal Reserve. Those who have reinvested intangible assets have defended their purchasing power over the ages. However, intangible assets are more popular among investors today, such as stocks and securities. Investors who were careful enough to get back in the stock market after the 2007-2008 Housing Crisis experienced spectacular results. With the US economy improving moderately and inflation picking up, the Federal Reserve has been picking up its pace on interest rate hikes. Bond and stock values will likely continue under pressure until the Federal Reserve stops their rate hike cycle. Now is the time for investors to start allocating capital in the very best properties that have stood the test of time in periods of uncertainty and inflation.

Diversify with Hard Asset Investing

Typical examples of hard assets include real estate, precious metals, shipping containers, art, and rare collectibles. These assets can at times move in the opposite direction of the stock market and can diminish your exposure to the equity and bond markets. Diversification into real assets would be an extremely wise thing for investors to do currently, especially with extremely high stock valuations and the recent volatility in the markets.

The Ideal Hedge Against Inflation

Supporters of hard assets believe that having tangible assets is the ideal hedge against inflation. In the past one-hundred years, the value of an ounce of gold has increased three-hundred percent if adjusted for inflation and ninety-seven percent decline in the purchasing power of the dollar. Gold has never been valued at zero and has been used as a means of exchange for several thousand years. In the recent hyperinflation crisis going on in Venezuela, the purchasing power is almost nonexistent. However, an ounce of silver in Venezuela can buy many periods of food and those who had precious metals have not gone unsatisfied. Most of us in the United States are satisfied and believe this situation could never happen to us seed investors should look at hard assets as a form of guarantee against inflation.

Serious Tax Incentives

For investors who see real estate as an ultimate tangible asset, they enjoy tax advantages that save them cash and help them to improve their overall net worth. A real estate investor can receive tax deductions on paying property taxes, interest on mortgage payments, insurance, and depreciation and the residual income they may be getting in their investment properties.

The Emotional Benefits

Hard assets can have an emotional bonus. An investor may purchase a rare collectible or any fine art because they value its exhibition in their home as well as the possible price appreciation. Purchasing a house may be a long-term venture, but the house also serves purposes for you and your family and helps to create lasting memories.

Intangible assets like stocks and bonds have helped investors gain good returns over the long term. Nevertheless, with market risk at peak levels and a rising interest rate climate, it is probably the right time for investors to designate funds into hard assets for extra diversification, an inflation hedge, tax incentives, and utility.