Liquid versions of these assets offer the added benefit of flexibility, allowing for allocation changes in response to different manifestations of inflation. For example, real estate should benefit from rapidly rising property prices and rents; commodities would benefit if the US dollar weakened; infrastructure would benefit from fiscal stimulus targeting increased infrastructure spending.
Inflationary pressures today are not something to be alarmed by but to watch carefully. Investors have a number of options that they can use in portfolios to help blunt the impact of inflation.
Sources of inflation vary, and they may require different solutions. By employing a flexible approach, investors can address inflation while maintaining the potential to earn capital appreciation and income.
Ron Temple is co-head of multi-asset and head of US equities at Lazard Asset Management
