2022 has seen prices increase across developed markets at paces not seen for 40 years. Investors are legitimately worried about how this will affect the value of their savings and the future cash flows they will depend upon.
1. Inflation currently represents the most significant threat to both fixed income investments as well as equities.
2. This situation is likely to persist for 12-18 months before stabilising again and will almost certainly necessitate further rate rises.
3. Rate rises and generally tighter monetary policy constitutes a radically different macroeconomic environment, and investment approaches accordingly need to be rethought.
4. Alternative investments will have a growing role to play in this new context, and within this overall category real estate offers one of the best possibilities to outrun inflation.
5. Real estate's attributes as an asset class (diversification, income yielding, capital appreciation, etc.) will shine ever more brightly in the immediate inflationary context.
The points above substantiates our views while presenting some of the arguments and evidence that have led us to this perspective.