2022 The Real Risk of Inflation

Contributors

Will McIntosh, Ph.D
Global Head of Research

Jay Johnston
Senior Associate, Research

Greg Stark
Executive Managing Director, Private Wealth

Jeff Holland
Managing Director, Private Wealth

May 2022

Executive Summary

  • The U.S. is experiencing the highest inflation in nearly 40 years, intensifying the risk of significant destruction to portfolio values and purchasing power as a result.
  • Most investors and their advisors have not experienced a significant inflation shock like this in quite some time. Further, forecasting inflation is prone to error and therefore necessitates a strategic hedge within investment portfolios.
  • When compared to other conventional inflation hedges, an allocation to private real estate (measured by the NCREIF ODCE Index) can offer strong protection while also potentially providing other benefits like compelling total returns, income enhancement, and portfolio diversification.