Episode 11

Not All Investments Are a Bust This Year

Investing in real assets

While global stocks and bonds have struggled so far in 2022, hard assets with contractual cash flows have done well and will probably continue this path so long as inflation is elevated. What are “hard assets with contractual cash flows”? And how do you invest in them? Versus Capital Chief Investment Officer, Casey Frazier, explains it all on this episode of Wealthy Behavior.

Wealthy Behavior: Not All Investments Are A Bust This Year
This automated transcript may contain grammatical errors.

00:00:10 – 00:05:05
Welcome to Wealthy Behavior, talking money and wealth with Heritage Financial. The podcast that digs into topics strategies and behaviors that help busy successful people build and protect their personal wealth. I’m your host, Sammy Azzouz president of Heritage Financial, a Boston based wealth management firm working with business owners, executives and retirees for more than 25 years. Now, let’s talk about the wealthy behaviors that are key to a rich life.

On today’s episode, we have a special guest, Casey Frazier, the Chief Investment Officer and Co-Founder of Versus Capital. Versus is a money management firm that specializes in building strategies using real assets that could potentially diversify portfolio returns and generate consistent income. I’m excited to speak to Casey today because as our listeners know, we’ve been talking about it on the podcast. It’s been a tough stretch for investment returns so far in 2022. Almost every asset class is down and some are tracking for some historically bad years. I say almost every asset class because some alternative investments and real asset strategies are positive year to date and real assets have historically been positioned as things that can do well in high inflationary environments like we’re living through now. So it’s all timely stuff. Welcome to Wealthy Behavior, Casey. Thanks, Sammy. I really appreciate you having us on the podcast today. Absolutely, glad to do it. So tell me a little bit about your background and cofounding Versus Capital. Yeah, so I started my career in finance right out of college and started doing research on money managers, both traditional and alternative. And then moved along and helped build some turnkey asset management programs and other investment products for individual investors and registered investment advisers across the country. And then kind of had a moment where I wanted to move over to the real estate side and started underwriting individual real estate transactions and really building out a new skill set because I really found that real estate was really interesting. So I started doing individual transactions, walking properties and building models and spent a few years doing that and underwriting those individual transactions. And then as we kind of decided to launch versus capital and build out what we were going to do from an investment strategy standpoint, we started with real estate and kind of went back to my roots in picking managers. So I spent the first part of my career underwriting managers and doing manager research and diligence and then the next part of my career underwriting real estate deals and then somehow magically we end up building out a product that uses multiple managers within real estate for our first fund. Real estate and I mentioned real assets a couple of times in the introduction to the podcast. For those who may not be aware, is there a definition of real estate, real assets, that people can anchor to for the rest of the podcast? Yeah, I think a lot of people talk about real assets generically, but for versus capital, we define real assets as tangible or hard assets that have contractual cash flows. So for us, real assets are investment classes like real estate-obviously a tangible investment that has contractual cash flows through leases. We include infrastructure investments in that. We also include farmland and timberland. Other people may widen that definition and include things like commodities or precious metals, or TIPS, those can all be kind of pulled into the real assets bucket. But for us, we’re very specific in that definition and that it’s a tangible hard asset with a contractual cash flow. And is that the reason why you kind of shy away from those, you know, borderline maybe real asset definitions because they’re just not as tangible- the commodities, the tips, the metals. Absolutely. So when we think about real assets for us, we think about those sectors as being inflation, expectation investments, where for us, when you buy a tangible asset, that when you have a building that’s made of concrete and steel, that has a tangible value, regardless of what’s happening, and that contractual cash flow has value and is typically tied in some way to changes in inflation. So you might have a CPI inflation escalator within that lease or just natural rental growth within those leases. And so because of that, it’s less sensitive to changes in expectations of inflation rather than actual inflation that makes its way into a marketplace. Yeah, so you’re looking for a tangible, rational path to a return, whereas in something like gold, for example, people buy it when they’re worried about inflation because they just think it will go higher because other people are going to do the same thing.

00:05:06 – 00:10:00
That’s exactly right. That’s a really succinct way to say that Sammy. So when we think about real assets for Versus Capital, that tangible nature rather than just something that’s a financial asset, we think of a tangible or hard asset. So that’s the easiest way to import our definition and to real assets. Yeah, and so you’ve already touched on it a little bit, but why do they do well during inflationary environments? How is the return generated? How is it enhanced? I guess in any environment, but in particular, in an environment like this. Yeah, so we’ve loved these private hard assets or traditional real assets in our definition in that because they do have a couple of things going for them in an inflationary environment. We kind of unpack that a little bit in real estate that these have contractual cash flows, so in inflationary environments in both real estate, infrastructure, farmland, and timberland, those contractual cash flows can change over time. And they can do that in a number of ways depending on the underlying asset class. They may be tied directly to CPI as we talked about with some real estate leases and some infrastructure leases specifically. They also may just be tied to changes in inflation by the duration of those leases. And what I mean by that is you may have a fixed lease for a short period of time, like an apartment building, it might be 12 months and then you get to reset that lease in this environment. And so we’ve seen that happen in 2020 and 2021, and then to 22, where inflation expectation changes then I can pass that along to my tenant. That same thing happens with my farmland leases as crop prices are going up and we’re all hearing about food scarcity and changes in crop prices. As I go back to my farmer and I renegotiate that lease, then I can charge him higher rent because he’s making more money. And so that’s one way that inflation makes its way into these asset classes. It’s changes in cash flows. The other side of it is we get the benefit of what we just talked about in those other asset classes where you’re just expect where more people are expecting inflation to come so they’re searching for those. And so you also get that benefit. So as the prices, as people get concerned about inflation, now they say, oh, I need to put some inflation hedging into my portfolio, and they say, oh, well, the toolbox for assets that perform well inflation is fairly small so they start looking for real estate, farmland, Timberland, and infrastructure. So more capital comes in and because these are tangible finite assets, that means prices increase in environments like this, historically. So you kind of get a double benefit. You get rising cash flow, you get increasing interest or more capital coming into the market so you get you can get increased returns in inflationary environments. And I think on that first piece, anybody who’s tried to renew their lease recently definitely understands exactly what you’re talking about and it’s extremely relatable. On the second piece, I saw something this year where corporate earnings have actually grown, but the multiple that people are willing to pay for those corporate earnings has declined. So the stock market is essentially negative. So what you’re talking about is I have a return path in real assets and people are actually willing to pay for it in an environment like this. So, you know, there’s multiple expansion, so to speak. Yeah, I think that’s exactly right. So when you think about the times when the stock market does the best, you have earnings growth happening and then you get multiple expansion. This is that type of environment for real assets. And that’s why you mentioned it’s been a tough year in stocks and bonds in those traditional asset classes, firms like yours that diversify clients assets into things like real assets have performed much better because those asset classes are getting the benefit of those increasing cash flows as well as that multiple expansion. So people understand, I think, real estate very well in terms of the nuts and bolts of returns. Talk a little bit about farmland and infrastructure where people may not be as familiar with what you’re getting normally as an investor in those two areas. Yeah, we like to think of them very similar to one another, right? I always joke that a farm- because we don’t operate in the investments that we do at versus capital, we don’t operate the farms directly so we’re not farmers-but farmers are our tenants, so it’s really no different for me if I own an apartment building and I have 300 people leasing those apartments from me or I have 300 farms and I have 300 farmers who are leasing.

00:10:01 – 00:15:00
But the best thing about being a farm owner is that I never have any vacancy. I also don’t have any costs. So when someone moves out in an apartment that I own, then I have to go and I have to tear up the carpet and put new carpet in and I have to paint and as time goes on, I might have to put new stoves in. But for farmland, if my tenant says, hey, I’m no longer going to lease this from you. I just go out to the ten neighbors that live all around and say, hey, I have this tract of land, “would you like to lease it from me?” And I don’t have any cost structure, so it’s very similar to the returns of real estate. So we have an income component. That’s that rent that gets paid by that farmer. Oftentimes, we’ll make a deal that says, hey, if prices are better, we share a little bit of that rent with me because you’re going to make more money. And so we’ll have those are like flex leases or crop share leases so it’s not always fixed. But if they are fixed, they’re typically shorter term in nature. And then we hold those assets over time and we think that with the amount of variable land decreasing with production increases because of technology that owning a piece of great farmland will be more valuable in the future. And so there’s a component of income return to it and then there’s a component that’s more appreciation or land value increases in farmland. We also think that infrastructure is very similar. Now it’s very, very diverse. You could own an infrastructure asset such as a port, like a seaport in some part of the world. And you can also own a toll road, you could own a utility company that’s providing electricity or wastewater treatment, and so there’s a lot of different ways to invest in infrastructure. But the concept is very similar. You will have a contractual cash flow with someone who’s using those goods and services. So whether that’s you as a utility user in your local economy that turns on your light switch and you get an electricity bill every month. Or you’re driving your car on a toll road, the more that people use that toll road, the more income that we would generate on those assets. So there’s an income component and then because there’s a cash flow tied to that, someone will pay you value for that cash over time, just like when we think about the earnings of a company, which should drive values in the stock market, the earnings, and the cash flows off of these assets should drive the ultimate value of an infrastructure asset, a farmland asset, a Timberland asset or a real estate asset. And those are great explanations. Thank you in terms of kind of understanding the asset class or the investment type and how it differs from traditional stocks and bonds. And then you can take it much deeper in terms of like with stock investing, you know, you could be a value investor, growth investor, dividend focus investor, and you can talk I’m sure at length about which types of real estate you’re looking at, which types of farmland, which types of infrastructure. But to take it a step back for a second, you mentioned private real assets a few times and I know that with there’s private real estate and then investors can get real estate through publicly traded REITs. Are there public equivalents of infrastructure and farmland investments and then I’ll ask you to kind of elaborate a little bit on the difference between publicly traded REITs and private real estate. Yeah. So as you mentioned, for real estate, everybody has likely heard about REITs as a way to get access to investing in high quality real estate. There is listed infrastructure market that buys a lot of those same assets, they can own a toll road or that desalinization plant. For farmland and Timberland, there really are not. There are a couple of farmland REITs, but not very many and they’re very small. There are a few Timberland REITs, but again, not very large part of the market so hard to invest there. And a lot of times in the timber part of the market, those are really vertically integrated. So you’re not just owning the land, you’re actually owning the land and the sawmill operations and maybe some trucking part of that- so it’s much more vertically integrated. So it’s a much more operating intensive business than we typically do than typically is on the private side. So there are public market access points, but they’re not as pure play as they are for real estate and REITs. That’s a great explanation. I wasn’t aware of some of those access points and their limitations. When you think about publicly traded REITs versus private real estate, what are the pros and cons of kind of going in either direction? Yeah, just in interest of full disclosure, we invest in both private and public real estate. We invest in both public and private real assets, and infrastructure, farmland, and Timberland as well.

00:15:01 – 00:20:03
We think that having all of the tools in your toolkit makes the most sense, but there are differences and we tilt our portfolios towards private, largely because of some of those differences. So when you’re adding these asset classes to a portfolio, a multi asset portfolio, like you are at Heritage, part of the reason you’re doing that is for the diversification benefit. And so what happens when you put real estate in a REIT into the public market, it acts and feels a lot like public equities. And so part of the reason that you’re including that in a portfolio starts to go away a little bit when you include it in the public market. So there’s something that happens when you wrap a portfolio of apartment buildings or industrial buildings into a company that is publicly traded, it partially is traded on the value of the underlying real estate that it owns, but it’s also partially traded on what’s happening in the broader public equity markets. And so one simple analogy, or way to think about this, is as money goes into passive mutual funds and there are a number of public reach that are in those indices. If money is coming out of those mutual funds, that means they have to sell those holdings, even though that has nothing to do with what’s happening at the underlying company. And so there’s just a change in the risk and return characteristics. There are a number of other factors that we could go into deeper if you want, including leverage differences, the amount of development and some other operational differences between public and private investments, but there is something that happens and that’s the same with infrastructure investments, those timber REITs have some of that as well as anything in the agriculture space. Yeah, and so some of our listeners are probably already wondering, how do you own private real estate, Farmland, Timberland, private infrastructure, in a mutual fund which typically, as they’re aware of it or they understand it, has daily liquidity. So structurally, how are you able to do this? Yeah, that’s really kind of the crux of the challenge that created Versus. Myself and two business partners, you know, over a decade ago, sat down and said, man, there’s these great investments that have really good durable income streams, they have really good risk adjusted return characteristics, they have low correlation to equity and fixed income portfolios and large institutions are the only people who have access to them. And so we got our hands dirty and said there’s got to be a vehicle or a structured. Unfortunately, we would love to do it in a mutual traditional mutual fund, but because private assets don’t have daily liquidity, you’re very limited in your ability to include private assets in a traditional mutual fund. Luckily, the SEC over 20 years ago now had created a structure that is called an interval fund. So it looks and feels a lot like a mutual fund in that firms like heritage could put it into their portfolios. There’s a 5 letter ticker symbol much like a mutual fund, you could buy it every day, but the caveat is for selling that mutual fund- because it has the ability to have private investments in it, it only happens four times a year. So there’s quarterly redemptions and daily buys. And so the structure was really used in a very limited way when we launched this fund and now we’re starting to see more and more asset classes that investors individual investors are getting access to, that they should have access to, that have traditionally only been available to large institutions because of this kind of hybrid structure that allows the ability to have private assets with limited liquidity but not as open as a traditional daily liquid mutual fund. Yeah, that’s fascinating. How does the quarterly liquidity work? So the quarterly liquidity is in a redemption or a tender offer. And so as the mutual fund will go out and offer an amount of shares that they’re willing to buy back, they have to be willing to buy back a minimum of 5% of the outstanding shares in that mutual fund in any given quarter, and that can be increased at the direction of the board. And so that tender offer is sent out to all the shareholders and then those shareholders who would like to redeem could put a sell order in, just like if they were selling any other mutual fund, and then assuming that there are less than 5% of the outstanding shares being redeemed then they get their full sell order. And so that’s what happens in most market environments. Sure. If there was a period where more people would like to tender their shares than shares are available, then they would get their pro rata portion.

00:20:03 – 00:25:14
Got it. Understood, it completely makes sense. And it provides less liquidity than a traditional mutual fund, much more liquidity than a pure private investment or pure private investment in any of these asset classes, so it seems like a good hybrid solution. You, I believe, offer these strategies only through investment advisers-you’re not accessible to anybody who wants to invest in the Versus funds. Is that so and why is that the case? That’s exactly right. So we decided, when we were going to offer these limited liquidity vehicles, kind of this hybrid structure that we wanted to go out and partner with firms like Heritage that have a fiduciary duty to their clients. And so with that ability to access these private assets, comes that limited liquidity and so we wanted to make sure that we only offered them through firms that had that fiduciary duty. And so that is a key. So you can’t just jump on to a Charles Schwab or a Fidelity as an individual investor and buy into our two funds. So that is a key to our strategy. And we think it’s the right client base for these less liquid products. That makes a lot of sense and I appreciate you sharing that with us. Pivoting a little bit to maybe what’s going on in the real asset space right now. Positioning myself, maybe as the funnel point for some frequently asked questions that we get, one of which is commercial real estate. Anybody who’s kind of paying attention to hybrid work environments, to some cities that are not as busy as they used to be, et cetera, et cetera. People will ask, why would I want to have a long-term allocation to commercial real estate? What’s going on in that space and what would you say? Kind of what are the pros and cons of it just given the environment that we’re in? Yeah, so what we saw in the pandemic was an acceleration of a number of trends that we’ve been watching in the real estate space for a decade. And some of those are really simple, right? Retail being one of those examples where people started buying more things online and consuming retail in a different way. Now that’s not a new phenomenon. Obviously, Amazon has built a pretty large business that didn’t just happen out of the pandemic so we’ve been watching this phenomenon come over time, but what did happen during the pandemic was it accelerated some of those trends. That’s the same in office. Working from home is not a new thing. We’ve all been indoctrinated in it over the last few years, but there was about 10% of the workforce that worked from home before the pandemic. And so what we’re seeing within the commercial real estate market today is that those trends have just accelerated, but it hasn’t changed fundamentally and made any of those areas of the market obsolete. It’s just changed the way that we consume them. And so when you think about retail, we’re at a vacancy rate in the overall retail market at a 20 year low because what happened was we realized some of these concepts aren’t going to work, where you had too much retail in the market, so we’ve repositioned those assets. We’ve made them multi-family, we’ve knocked them down and made them multi-family assets or we change them from a traditional mall and we put an industrial building on there instead. And that’s what is great about commercial real estate is that it will evolve to the market over time. And so this is a marketplace that today is seen with extremely strong job market, with a really strong consumer after all of the fiscal and monetary stimulus coming out of the pandemic, we’ve seen the demand for commercial real estate expand dramatically. We talked about this earlier Sammy when you mentioned that if you were going to rent your release your apartment that rents are going up, that’s happening across the board in commercial real estate. It’s why it’s performed really well over the last 12 months is because the demand is outpacing the supply. Is there any area where that’s not the case- office towers downtown, skyscrapers, or is it, you know, hey, these are smart folks and they’ll reposition and they’re not going to let the asset not be fully utilized. There’s certainly going to be a bifurcation in the market and I’ll go between retail and office because that bifurcation happened sooner in retail. We saw that the class B and C malls in the suburbs were in trouble a decade ago and we’ve watched that transition happen. There certainly is a portion of the office market that is in trouble. As we come back into the work environment we’re seeing a big bifurcation. So for those markets that have extremely good job growth that have new high quality office product, a lot of that creative office, if you can think like that, the demand for that space is significant.

00:25:14 – 00:30:02
For older product outside of those markets, some of those markets might be in traditional downtowns where a lot of people are not excited to go back to where you have after the COVID pandemic, you have an increase in crime or transportation issues. Some of those are markets that are going to have to go through that process, much like the class C and B malls did, that’s going to happen in a lot of those downtown markets or in a lot of that suburban property type that if you are processing loans, there’s no reason for you to drive to a suburban office building. You can evaluate the performance of that employee based on the number of loans they underwrite. But if you have a tech company and you want your creative people sitting together in a room, that’s pretty hard to replicate on a Zoom. And so we’re seeing a big increase in office leasing velocity, but it’s only at a sub-sector of that office market. So to use an analogy that maybe people more familiar with stock investing will understand just because you can point to a sector or certain stocks that thematically are not attractive based on where the world is going or where it is right now it doesn’t mean you turn around and you sell out of your S&P 500 Index fund. Just because there are areas of commercial real estate that may struggle more than others, doesn’t mean you kind of abandon the whole asset class just because you’re reading stuff in the journal about how the pandemic has impacted office space. Absolutely. That’s a great analogy because when you think about that, the underlying market will price those assets, appropriately, right? Capital will flow into those assets and so you could buy an office asset or a retail asset at a more favorable price in a current environment than you could something that has a better thematic background to it like a multi-family asset or an industrial asset. So that income component of your return will be lower in those growth sectors, but higher in those value sectors. And so when we think about building office portfolios or any of our portfolios, we’re a core investor, we think there’s value in both growth and value and we want to be more down the middle and balance those two out. That makes a lot of sense. Thank you for sharing that pivoting from real estate and commercial real estate to something like infrastructure. What does the global infrastructure demand look like and are there any themes like energy transition or things of that nature that people should be aware of or understand? Yeah, and we’re really excited about the infrastructure sector. And when we think about what that looks like going forward and what drives the demand for new infrastructure products, you have to think about population growth and the movement of emerging economies into developing economies and the obsolescence factor within developing economies. And so when you think about the size of the infrastructure market, we estimate it to be about $50 trillion across the globe, it’s a significant asset class. And when we think about the demand for infrastructure going forward, we see a number of themes that need significant capital. One, you hit it right on the head, the transition of our energy sector is going to need significant amount of capital. So renewable energy, the transition to get to renewable energy from more traditional fossil fuels, so moving from coal to natural gas to renewables over the next 20, 30, 40 years is a significant investment opportunity infrastructure. Digital infrastructure, which wasn’t even a sector in infrastructure 20 years ago, really, is now at the forefront of infrastructure as we continue to consume more and more amounts of data we need more data centers, we need more fiber, we need more wireless towers. All of those are key opportunities within the infrastructure market going forward. And one thing that we think is really pushing us to this investing supercycle for infrastructure is that the traditional investor, or capital source, behind infrastructure projects were governments. Well, we all know that after the GFC and now the pandemic, the balance sheets of a lot of governments are strained, they have other things they need to put their capital into. So you really need private capital to come alongside public capital, or replace public capital, in order for the infrastructure of the globe to be rebuilt and to be continued to build over the next decade or more.

00:30:03 – 00:35:04
Got it. No, that makes a lot of sense. It’s interesting stuff when you really dig into it. The other two spaces- farmland and timberland. Anything going on there, whether it’s, you know, how is Ukraine, Russia impacting farmland? People have seen, I think, a lot of housing construction costs up this year, maybe in last year and during the pandemic. What’s going on in those two spaces right now? Yeah. Let’s start with farmland because obviously it’s a travesty what’s happening with the Russia-Ukraine conflict, but there are going to be downstream impacts and we’re seeing that make its way into farmland. So Ukraine, depending on how you measure it and Russia are 30 to 40% of the global grain market. So when you take off that as they shut in the Baltic Sea and you eliminate the ability for that to be exported into the market, you put a pretty significant supply constraint on very important food sources and it’s one of the reasons we’re seeing one of the big keys in the inflation trench that we’ve been having has been increases in food costs. That’s largely or one of the factors is this conflict in Europe. And so that’s a challenge. It is a global market as supply comes offline that puts higher pricing into the market and so you’ve seen commodity prices increase within the farmland sector across the board. And so that’s one of the big impacts there. And so that’s a challenge in that market. It’s a challenge and an opportunity for the U.S. farmer who now has been exporting those goods to try to make up for that loss demand. And so it will be a very large export year for U.S. farmers to try to make up that loss at loss of supply. And is that, this could sound like a dumb question because I don’t know exactly how to phrase it, but is it feasible to, as an industry the U.S. farmland industry to kind of increase its production to meet a supply issue overseas and then not be stuck in years when that supply from overseas comes back online with too much product? Yeah, so that’s a great question. I mean, obviously that’s a 30 to 40% of a market, you can’t turn on a dime and make up that demand. And there’s also other factors outside of it, weather patterns, technology, and so there are a number of factors. But you can increase the production, it’s like any other supply and demand market. So if I’m a farmer, there’s a cost at which I’m willing to put more and more resources into expanding production. So in some years, if corn is at a price that is too low to maximize all of my output, then I’ll let that land go and I won’t lease it or I won’t farm it. But in periods like today where prices are very high, and we saw this in the ethanol boom that in 2013 and 14, you saw a big increase in the amount of production. And so we should see the U.S. farmer pick it up as well as in South America, those farmers will also be trying to pick up their output because pricing will drive that output so we should see an impact there. Now, the same thing happens as this resolves itself over time. You can also cut that back and show if pricing comes back down that will also have an impact on how much farmland gets tilled and put into production. I’ll make this question, I think, a lot clearer, a lot easier. What the heck happened with lumber costs over the last few years? Yeah, that’s actually not that clear, right? But let’s think about a couple of things, right? So lumber costs going into the pandemic were normalized and then when we got into the pandemic, you saw a number of things happen. One, the demand for lumber went way up. A lot of people were stuck at home, looking for things to do and rather than going on vacation, they decided to put on a deck. Well, that created a demand for lumber. At the same time, the demand for lumber was increasing, the fed is also cutting interest rates and so the demand for new housing is increasing. And so at that same time, we have a challenging environment for those sawmills to take wood from the forest and create lumber. So because they had staffing issues, they had to shut down some of their factories at some point.

00:35:05 – 00:39:21
And so what happened is you have this supply getting stuck in a bottleneck at the sawmill and the demand is just starting to get stronger and stronger. So that’s what started the changes in lumber prices. Then, just like you do in any other market, when we get the meme stock phenomenon. And you start to see people speculating on lumber prices and so then it went off the rails, right? So then it becomes more of a speculators market and the supply and demand imbalance gets exacerbated by all of these people who are speculating on the futures market. We stay away from all of that, we don’t invest in lumber. We want to own the trees and when we want to hold them over time and we try to stay away from that kind of the financials market again, going back to that hard asset, but as the demand for lumber has increased over the last couple of years, that has made its way into price increases in timber, which is what we sell. And so that income component of our timber returns has gone up over the last two, three, four quarters because of it. Got it. No, that makes sense. And where are our lumber prices now? Is it safe to put that deck on or are you still waiting? Lumber prices are still elevated and we’re still having issues. And every time they come back down, we see another entrant in the market. Now, as we think about what’s happening with interest rates increasing new housing starts are starting to slow. So that may take some of that pressure off of the lumber prices over the next few quarters here. So you may want to wait another quarter or two before you get out your hammer and nail apron. And anybody who knows me knows I won’t be doing that anyway, but I was asking just in case people who are wondering for themselves. So Casey, thank you very much. I think this has been a phenomenal introduction to a very interesting asset class and we could go on for a lot longer I’m sure. But as we wrap up, you know, what would be one key thing you want people to take away from this conversation in terms of their understanding of investing in real assets? I think the key thing is owning tangible, real assets that are essential to the functioning of modern-day society is a really good way to add a diversifying asset class into your portfolio that performs well in periods like today where you have high inflationary environments, but also performs in low inflationary environments because of the contractual nature of those cash flows, the essential use nature of those assets and just the overall durability of these investments. That makes a lot of sense. Thank you. And since the name of our podcast is called wealthy behavior, what’s the best piece of financial advice you’ve either received or shared over the years? The best advice is to stick with the course, right? I think we get caught up and especially in today’s society with so much information coming to us and at us that we want to make snap decisions within our portfolios and so the best advice I’ve ever received and or given, and this was from someone else, so I’ve just passing this along-build out a diversified investment portfolio and stick with it. Awesome, great advice. Casey, thank you very much. Thanks, Sammy.
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The views and opinions expressed in this podcast are that of the speaker, are subject to change and do not constitute investment advice or a recommendation regarding any specific product or security. There is no guarantee that any investment or strategy discussed will be successful or will achieve any particular level of results. Investing involves risks including the potential loss of principle. *This automated transcript may contain grammatical errors.


About Wealthy Behavior: Heritage Financial Services

Wealthy Behavior digs into the topics, strategies, and behaviors that are key to building and protecting personal wealth and living a rich life. We’re Boston Massachusetts-based wealth managers who have been helping busy, successful people pursue their financial goals for more than 25 years. Hosted by Sammy Azzouz, President & CEO of Heritage Financial, Wealthy Behavior digs into the topics, strategies, and behaviors that are key to building and protecting personal wealth and living a rich life.