Most assets that don’t have fixed income streams are inflation hedges…when you have inflation…prices rise broadly…you’re thinking of “unexpected” inflation or “changes” in expected inflation rates, which is different from “inflation”.
Yes, that’s right. I was thinking of unexpected, not inflation in general
My mistake actually then, I think most people use your interpretation when they discuss inflation. Definitely interested in hearing what people have to say about that.
It just seems to me an inflation hedge would be more useful for unexpected inflation, since the expected kind is priced in most of the time (theoretically).
Yes, I suppose it depends if you hedge involves borrowing too. As more “fixed” leverage during high unexpected inflation increases returns.
I want to buy a property (flat) in the philippines, which is an emerging market. You guys think this will be riskier? The apartment would be in the capital city.
It’s more of a non-financial decision rather than a purely financial investment, though I would like to get some kind of return. I mainly want the place to have something to fall back on etc.
I may even consider working there in a few years, so having a place near the city would be ideal (and it beats staying with family for sure).
If you are able to buy and hold, real estate is one of the least risky assets
Tbills,
Real estate,
LTB,
Equities
Whether the prospective flat is a good investment or not will depend mostly on the city and neighborhoods space market… aka the supply of space vs. the demand for space…
Take a look into urban economics and space markets