Physical Assets and their Features

Physical assets are tangible assets. Physical assets are more growth investments that are bought for the appreciation in value rather than the income they generate. The value of physical assets are seen to move in tandem with inflationary trends, and as such they may be able to generate inflation-protected returns. The primary risks in physical assets are from the illiquidity that some, such as real estate, suffer from. The other limitation of physical assets as an investment is that they are typically large ticket investments and require substantial savings, or a combination of savings and loan to acquire the asset.

The physical assets may be divided into- real asset (land/ building, commercial/ residential) and commodities (gold/ silver).