Tags: Dreman | Real | Estate | Stocks | Protect | Inflation

Dreman: Real Estate, Stocks Protect Against Inflation

Wednesday, 28 Apr 2010 09:35 AM

Stocks are a good way to hedge against inflation, says contrarian investor David Dreman.

Real estate is also a good investment, he says.

“Everything people are cowering away from today, I would prefer to invest in. If we have an inflationary environment, value stocks should do well over the next 4-5 years," he says.

"And can I say this dirty word: real estate. Real estate has been hit so hard if you have a holding period of 5 years with 20-25% leverage, it is a 4-1 play on the upside,” he told GuruFocus.com.

Dreman, the founder and chief investment officer of Dreman Value Management, said he believes that inflation will be 10 percent to 12 percent once unemployment improves.

“There is no question there will be higher inflation in the future and housing with leverage will be an excellent investment,” he said.

His fund also holds a large position in Altria, the tobacco company, which has a current yield of 6.5 percent.

Dreman said he likes the company because it consistently generates high yields and “made us an awful lot of money over time. Tobacco companies are able to keep raising their prices. And they don’t have as much legal liabilities because the Supreme Court has struck down a lot of these lawsuits.”

Stocks rose recently as many companies reported profits from the first quarter, Bloomberg reported.

“The earnings season so far has been a home run, and we expect that to continue. These numbers are much stronger than expected,” said Philip Orlando, chief equity market strategist at Federated Investors, which manages about $400 billion.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
Stocks are a good way to hedge against inflation, says contrarian investor David Dreman. Real estate is also a good investment, he says. Everything people are cowering away from today, I would prefer to invest in. If we have an inflationary environment, value stocks...
Dreman,Real,Estate,Stocks,Protect, Inflation
265
2010-35-28
Wednesday, 28 Apr 2010 09:35 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved