As signs point to continued turmoil in the U.S. and global economies, diversifying with real assets may help anchor investor portfolios. Historically, real assets such as commodities, direct residential and commercial real estate and real estate investment trusts (REITs) have not been highly correlated with stocks and bonds. More broadly, the real asset class encompasses a diverse range of investments: commodities, which are traded raw materials and products such as metals, rubber, oil and agricultural goods; limited partnerships in the harvesting of such natural resources as timber and ore; residential and commercial real estate; and infrastructure such as roads, ports and bridges.

In today's volatile environment, real assets, which may seem unglamorous in strong markets, show their true strength. They offer long-term investors a source of income as well as a potential hedge against inflation, which investors experienced in the first half of 2008. Deflation may present opportunities to add real assets at attractive prices. Such tangible holdings as factories, office buildings, plant equipment and income-producing property have always played a crucial role in protecting and growing business owners' wealth. Wealthy individual investors are now seeing the value of real assets as a buffer against the effects of roiling markets by allocating them to as much as 15% of a total portfolio.