Real assets may be effective for portfolio diversification because

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Real assets, such as real estate and commodities, are often less positively correlated with financial assets like stocks and bonds, making them an effective diversification tool. This means that when financial assets are performing poorly, real assets may perform better, providing a buffer to a portfolio's overall performance. However, real assets may not necessarily be a hedge against deflation or perceived as a safe haven for investments.

Real Assets May Be Effective for Portfolio Diversification Because