REITs, Your Home, and the Asset-Allocation Decision

Topics:
Commercial Lending
Tags:
Asset,
REIT,
Operational Planning,
Management,
Industry,
IndexFunds.com,
Diversification,
Business Operations,
Asset Management,
Asset Class,
...
Source:
IndexFunds.com

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Overview: Diversification across asset classes is an important component of an investment plan. It reduces risk. It is also important to diversify across asset classes that have low correlation. It is therefore a good diversifier of risk and should be considered when constructing an asset-allocation plan. Once a home-owning investor decides to include real estate in a portfolio, he or she must decide how to view their home in the asset-allocation process. The diversity of portfolio decreases if the value of home is based on a local industry, and if happen to work in that industry. This lack of diversification would be further compounded if investment portfolio were loaded with assets with exposure to the same industry to which home is exposed. Therefore, it is very important that investors consider how a home is financed in developing an asset allocation strategy.

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Format: HTML | Date: Sep 2000 | Pages: 1


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