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Re: International Exposure in Investing
Old 04-03-2003, 07:12 AM   #21
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Join Date: Nov 2002
Posts: 398
Re: International Exposure in Investing

*As far as real estate, I
have owned virtually every kind available, i.e.
single family, apartments, raw land, commercial, you
name it. *I have never lost a dime in over 30 years of
real estate investing. *So........................if it's between
real estate and common stock, I would not have a
problem deciding. *
This discussion has morphed into a continuation of the discussion of "real estate as an investment" (which is OK!)

A couple of financial facts:

1. For anybody with more than a few thousand dollars to invest, investing is not an "either/or" proposition. It is both practical (through mutual funds) and desirable (because of the principle of low correlation of annual total returns) to simultaneously invest in numerous categories of assets.

2. Owning real estate directly is a combination of a "job" and an investment. The time spent managing the property should enhance the rate of return on the investment, but has an "imputed cost," which, if valued at, say, $25 per hour, will substantially reduce the apparent return on the invested equity.

For most people who don't want to become "real estate enterpreneurs," the best approach is to include REITs in their investment portfolio. Over the past 15 years, REITs have had about the same cumulative total return as U.S. stocks, with virtually zero correlation in annual total returns. That is a strong argument for owning some of each.


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Re: International Exposure in Investing
Old 04-03-2003, 09:54 AM   #22
Thinks s/he gets paid by the post
Join Date: Dec 2002
Posts: 3,875
Re: International Exposure in Investing

Hello Ted! Morphed indeed!

I confess that my life long fondness for real estate
(in all of its forms) along with my strong aversion to common stocks colours my advice significantly. The extra
time required by active involvement in real estate (as opposed to REIT
investing) once seemed like a small price to pay. Now, I am no longer interested in actively managing
anything more demanding than deciding what fishing bait to use, or the selection of the proper
time to begin cocktail hour. All kidding aside. There
is not a single thing I need that I can rely on common stock investing to provide. Thus, it is all downside for me,
because there is no reason to take the risks involved.
Only a fool would go in that direction.

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