Original title: Qualcomm IncHow to invest under the background of inflation? BlackrockRecommend two major investment categories
Against a backdrop of rising global inflation, investors worried about the rising cost of living can consider investing in real estate and infrastructure assets, which have traditionally outperformed other assets in a highly inflationary environment, according to a research report by Blackrock, the world's largest asset manager.
Blackrock examined the average annual returns of major categories of assets under different economic growth and inflation patterns over the past 20 years. The study found that returns on real estate and infrastructure assets in the US and around the world were higher than those in stocks and bonds in the face of high inflation.
The report shows that when economic growth andWhen inflation is high, US real estate is the best performer, followed by global infrastructure assets, followed by global real estate.
In addition, when inflation is high and economic growth is low, global infrastructure assets perform best, followed by US real estate, followed by global real estate.
Steven Cornet, head of US real estate assets in Blackrock's research and strategy department, said in an interview on Thursday that these properties tend to perform better in periods of high inflation than traditional asset classes, in part because "leases and sources of income of these houses are directly or indirectly linked to inflation."
"over time, the cash flow of [such companies] will keep up with inflation." Cornett said.
Us inflation will be higher than the Fed's target in the medium term
Blackrock reports that when inflation and economic growth exceed 2.5 per cent, they are considered high. "inflation is hard to predict," Cornett said. "I don't envy the Fed at all."
According to the report, Blackrock expects US inflation to rise above the Fed's average target of 2 per cent in the medium term under massive monetary and fiscal stimulus. Blackrock expectsThe inflation rate in the United States will be close to 3% in five years.This is "higher than the current break-even rate (Break-even rates), but well below the hyperinflation level of the 1970s".
"We think inflation-adjusted real yields will remain negative," Mr Cornett said. If 10-year yields remain below 2.5 per cent, "many other asset classes still look attractive."
"there are low yields everywhere," says Cornett, but infrastructure and real estate assets have higher yields, and real estate is attractive in the context of high inflation.