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In times like these, tangible assets belong in every well-structured portfolio as a hedge against inflation

The "Silicon Saxony" around Dresden is a good example of genuine location qualities in eastern Germany, especially in Saxony.

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Das Foto zeigt wie der Goldbarren gegossen wird.
Gold bar casting Venezuela Image source: Enlightening_Images via pixabay

At the same time, however, an IT and chip cluster alone does not make a successful location. For this, other companies are needed, not only corporations but also medium-sized companies - as well as companies from all sectors. Ultimately, diversity is what makes the mix and success and at the same time creates security.

Investors also experience this when looking at their private investment portfolio. Those who only invest in life insurance policies, call money or savings bonds may be taking on little risk, but they are also foregoing interesting returns. On the other hand, those who focus exclusively on cryptocurrencies or deal with extremely risky shares from niche markets are taking on far too much risk.

Tangible assets offer protection, especially in such stormy times

The right mix in the portfolio is therefore crucial: and real assets play an important role here as a value-securing component with the best possible performance prospects. In a time increasing economic uncertainties and volatile financial markets, investors are looking for ways to protect and diversify their assets.

Tangible assets encompass a wide range of investment opportunities, including real estate, precious metals, artworks, infrastructure projects and natural resources. Unlike purely financial investments such as shares or bonds, tangible assets have a physical presence, which makes them more resilient to market fluctuations and inflation risks. This physical presence ultimately gives them what is known as intrinsic value, which exists regardless of short-term market sentiment.

A key advantage of tangible assets is their function as inflation protection: while the purchasing power of currencies can decrease over time, tangible assets tend to retain or even increase in value. In addition, tangible assets offer diversification, which is crucial for minimizing risk in an investment portfolio. By investing in different asset classes - such as a combination of equities, bonds and tangible assets - the risk of portfolio loss can be significantly reduced. This diversification ensures that losses in one asset class can be offset by gains in another. Tangible assets play a special role here, as their performance often corresponds less closely with traditional financial markets. Even in phases when equities and bonds are weak, they can deliver stable returns.

Since time immemorial, many for tangible assets on real estate - such as a rented condominium - or gold. However, the real estate bubble has recently burst and many financing arrangements have collapsed. Real estate also ties up a lot of capital. Gold, on the other hand, can be purchased in much smaller and therefore more affordable units, whether as bars or coins. In recent years, investors have made good profits with the shiny precious metal. The price of the troy ounce has recently reached a new all-time high. This raises the question: can this continue? In addition, gold is valued in US dollars. Buyers from the eurozone are therefore always exposed to an exchange rate risk.

Osmium is increasingly challenging gold and silver as a tangible asset

Gold alone should therefore not dominate the tangible assets section of the portfolio. Instead, it is advisable to broaden your view and look at the "rising stars" on the precious metals market. There is now no way around the bluish shimmering osmium. The eighth and therefore last precious metal was only discovered around 200 years ago. However, only since the possibility of crystallization was discovered around a decade ago has osmium really taken off as a material for the jewelry industry and as a tangible asset. 

With only one cubic meters of recoverable osmium no precious metal is rarer than osmium. And no other metal threatens to run out as quickly as this one. Due to the limited and already exhausted natural reserves from trustworthy sources, the crystallization of osmium will end as early as 2026, after which the hour of the secondary market in this context will probably have already struck, which will certainly be good news for all investors who have stocked up on the precious metal in good time.

Unlike gold, for example, osmium is absolutely forgery-proof: the crystal structure of osmium is scanned down to the nanometer range. This makes it impossible to replicate the structure. The security exceeds that of a fingerprint by a factor of ten thousand even on just one square millimeter. All data on certified osmium pieces, owners and osmium movements as well as customs and changes of ownership are also stored in the highly secure osmium database in accordance with the guidelines of the General Data Protection Regulation and the special precious metal is placed on the international market in accordance with US regulations.

Guest article by Ingo Wolf on the importance of precious metals for investment success. Ingo Wolf is Director of Analytics and Materials Science at the Osmium Institute based in Murnau.

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