July 31, 2012
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At a recent seminar on real estate investing as part of a family’s asset allocation, presenters and participants categorized real estate as an alternative investment to publicly traded common stocks and bonds. This statement assumes that common stocks and bonds are the primary asset classes that serve as the core positions in a diversified portfolio.
The word “alternative” implies that something has similar result possibilities while achieving them with different risk characteristics than the primary or generally used options. If that’s the definition one uses for asset classes other than stocks and bonds, then real estate would fall into the alternative category. However, if we consider the qualifications of a long-term investment, it ...
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