Hard Assets are investments with intrinsic value such as oil, natural gas, gold, farmland, and commercial real estate. Typically hard assets are an excellent inflation hedge. 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. 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 v. 1,100% increase in oil prices and 550% increase in western Canada farmland prices during same period) while commodity/hard assets appreciate in value.

See also

• Inflation
• Money Supply
• Commodity
• Futures
• Austrian Economics
• Milton Friedman
• Monetarism
• Hyperinflation
• Inflation Hedge
• Sustainable Agriculture
• Peak wheat

References

Category