Dan Foley from CBRE Investment Management joins ‘Halftime Report’ to discuss the ETF connection to infrastructure and real estate, the case for real assets in an inflationary environment, and what asset elements make up the fund. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

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LEARN ABOUT: Investing During Inflation

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Here’s why inflation makes hard assets a great investment

In times of economic uncertainty, investors are always on the lookout for ways to preserve and increase their wealth. One investment strategy that has stood the test of time is the allocation of funds towards hard assets. These tangible assets, such as real estate, commodities, and precious metals, have shown to be particularly resilient against inflation. And with the current economic landscape being plagued by concerns over rising inflation, hard assets are gaining increasing attention from investors.

Dan Foley, an Executive Managing Director at CBRE, is a prominent advocate for hard asset investments. With his wealth of experience in the real estate sector, Foley understands the value of tangible assets when it comes to safeguarding wealth in the face of inflationary pressures.

One of the primary reasons hard assets are seen as a great investment during inflation is their intrinsic value. Unlike paper assets such as stocks or bonds, hard assets possess inherent worth, often tied to their physical properties or scarcity. This intrinsic value makes them less susceptible to volatility caused by inflation. As prices rise due to inflation, the value of hard assets tends to increase as well, thus acting as a hedge against the eroding buying power of currency.

Real estate is one of the most popular hard assets preferred by investors during inflationary periods. As the cost of living rises, so does the demand for housing. This increased demand often leads to higher property values, making real estate investments an excellent way to capitalize on inflation. Additionally, real estate can provide steady cash flow through rental income, making it an attractive long-term investment option.

Commodities like gold, silver, and oil are also sought-after hard assets during inflation. These goods have limited supply and are widely used in various industries, making their demand relatively stable. When inflation strikes, the prices of these commodities tend to rise as well, offering investors an opportunity to benefit from their price appreciation. Moreover, these assets can act as a store of wealth, preserving value over time, especially during periods of economic uncertainty.

Foley advises investors to carefully consider the assets they choose during inflation. While it may be tempting to opt for niche or speculative investments, he suggests sticking to core assets with proven track records. Established real estate properties, for example, are more likely to appreciate steadily during inflation compared to risky and untested ventures.

Moreover, diversification is another crucial aspect of hard asset investments. No single asset class can guarantee a foolproof hedge against inflation, as economic situations can vary. Hence, investors should diversify their portfolios by including a mix of hard assets, such as real estate, commodities, and potentially other tangible assets like artwork or even cryptocurrencies. This diversified approach will help mitigate risks and maximize returns in the face of uncertain market conditions.

In conclusion, as inflation concerns persist, hard assets are increasingly seen as a great investment strategy. Tangible assets like real estate and commodities have historically shown resilience in times of high inflation, offering protection and potential growth. Dan Foley, with his expertise in the real estate sector, attests to the value of hard assets as a hedge against inflation. By carefully selecting established assets and diversifying portfolios, investors can take advantage of the wealth preservation benefits that hard asset investments provide.