This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Get 'Real' and Protect Your Money (Update 1)

Stocks in this article: CNS

Updated for February's CPI report.

NEW YORK (TheStreet) -- Inflation erodes wealth. A way to counter the threat of rising prices is by investing in so-called real assets such as gold and real estate.

Central banks have flooded the markets with cash, oil prices continue to rise, and emerging market economies are growing rapidly. That means inflation is very likely to increase in the years -- if not months -- ahead.

The government's measure of inflation, known as the consumer price index, or CPI, showed that inflation increased 2.9% in February from a year earlier. That's lower than the average rate of 3.6% since 1980. However, John Williams, an economist at Shadow Government Statistics, thinks those numbers are grossly understated given the changes in CPI calculations. If inflation were measured the same way it was in 1980, the average increase over the past 30-plus years would be 7.7%, he says.

Now, compare that to yields on savings accounts and Treasury bills. It's not hard to realize that, based on inflation alone, many people are slowly watching the value of their money deteriorate.

Add to the equation the high correlation in the stock market and high volatility, and suddenly the rule of thumb of investing 60% of your money in stocks and 40% in bonds no longer provides the returns they once did.

8 Stocks Rising Fast on Rich People's Spending



It quickly becomes clear that investors need to beat inflation. Cohen & Steers (CNS - Get Report), well-known as one of the largest real estate investment trust (REIT) investors in the world, suggests investing in real assets.

Investments in commodities, natural-resources equities and REITs, all backed by "real," or physical, assets, can diversify portfolios and mitigate volatility. Cohen & Steers' new fund, the Cohen & Steers Real Assets Fund, invests in all three of those categories.

"These groups are all attractive from a fundamental perspective," Cohen & Steers Chief Investment Officer Joseph Harvey says. "With values driven by increasing demand, barriers to supply and rising replacement costs, they also have inflation-fighting tendencies, which are the key to maintaining long-term purchasing power."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs