Real property equity investments can provide protection against purchasing power risk.
Real property equity investments refer to investments in real estate, such as owning shares in a real estate investment trust (REIT) or directly owning physical properties. Purchasing power risk, on the other hand, is the risk that the value of your money may decrease over time due to inflation, leading to a reduction in your purchasing power.
Real estate has historically shown a positive correlation with inflation. As the general price level of goods and services increases, the value of real estate often follows suit. This means that the value of your real property investment may rise in line with or even outpace inflation, helping to preserve your purchasing power.