June 7, 2022

Did Volatility Get You Down? Real Estate Can Hedge Against Volatility

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The rise of inflation and economic volatility currently sweeping its way through the United States is hitting countless industries and sectors of the economy, creating havoc on the average American's investment portfolio. Real fears that this volatility is causing significant problems for American investment portfolios, forcing them to look into alternative investment methods. Thankfully, there are ways to protect your portfolio against volatility—chief among them: an investment in real estate.

Real Estate Is Less Volatile

The studies are clear that real estate is less volatile than the stock market. There are many reasons for this, including:

  • You have more direct control over your real estate than you do the market. For example, you can raise rents, renovate, or make improvements that can customize a real estate asset and make it fit your needs.
  • Real estate comes in many flavors, including residential, commercial, industries, multi-family, etc. As a result, you can properly diversify your real estate portfolio and give yourself additional protection against the market.
  • The success or failure of real estate is connected to the market at large, but not in the same way as stocks or bonds. People will always need somewhere to live and work. As a result, a properly diversified real estate portfolio should, on the whole, continue to rise — even when the economy has trouble. 

Real Estate Can Protect Against Inflation

You know, of course, that inflation is currently ripping its way through the United States economy, eating investment gains and making it harder for the average American to keep value in their portfolio. So this is another area where real estate investments can provide natural protection for your portfolio. There is no question about it: an investment in real estate can protect against inflation.

How? Real estate's success or failure doesn't move with the ups and downs of stocks and bonds. This disconnection will continue to rise more independently than other market forces. Furthermore, real estate investments grow faster than the rest of the market in inflationary times. This means that a real estate investment can protect you from inflationary pressures. 

Want More Information? 

If you would like to invest in real estate and obtain more information, please email us at invest@infinity.re.

Posted By

Saman Yazdi

Saman oversees the identification, evaluation, and consummation of real estate strategies and investments. Throughout his career, he has raised over $1 billion in financing for commercial and residential properties.

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