Buy The Peaceful Investor at Amazon

Table of Contents and Launch Site

     I am offering the online chapters of the book using "The Honor System." Tip options at the bottom of the page.



Real Estate for Long Term Investing


Which of the following do you think is the best long term investment?
Bonds/CDs, Cash, Gold, Stocks, or Real Estate



"The first key finding is that residential real estate, not equity, has been the best long-run investment over the course of modern history. Although returns on housing and equities are similar, the volatility of housing returns is substantially lower."
̉scar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan Taylor31



What percent of your asset allocation should be in real estate?




Chapter 16 Notes - The Footnotes in the Book are sequential and for this chapter start at #274 and end at #308.
These notes are provided for those that have purchased the book and would like to access the notes and links directly.


1. Brad Case, REIT-Stock Correlations by Property Type: A Sharp Decline Data on REIT correlations October 18, 2017https://www.reit.com/news/blog/market-commentary/reit-stock-correlations-property-type-sharp-decline
2. https://www.bankrate.com/investing/financial-security-july-2019/
3. http://www.bankrate.com/investing/financial-security-0717/ July 19, 2017
4. https://www.bankrate.com/investing/financial-security-july-2018/ July 25, 2018
5. http://news.gallup.com/poll/233294/stocks-trail-real-estate-preferred-investment.aspx April 26, 2018
http://news.gallup.com/poll/208820/americans-favor-real-estate-long-term-investment.aspx April 21, 2017
6. https://news.gallup.com/poll/251696/real-estate-leads-stocks-best-investment.aspx May 7, 2019
7. https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx September 13, 2019
8. https://news.gallup.com/poll/236984/investors-stock-funds-best-long-term-investment.aspx July 11, 2018
9. http://www.ey.com/Publication/vwLUAssets/global-perspectives-2016-reit-report-ey/$File/ey-global-perspectives-2016-reit-report.pdf
10. https://www.reit.com/data-research/data/us-reit-industry-equity-market-cap
https://www.reit.com/media/nareit-media/understanding-reits-industry-equity-market-cap-breaks-1-trillion
11. https://www.reit.com/news/blog/market-commentary/total-size-us-commercial-real-estate-estimated-between-14-and-17
12. David Robinson, "New federal tax rules create advantage for real estate investment trusts", June 18, 2019 https://www.cnbc.com/2019/06/17/federal-tax-rules-create-advantage-for-real-estate-investment-trusts.htm
13. http://www.pionline.com/article/20111115/REG/111119987/reit-returns-beat-real-estate-funds-other-alts&newsletter=alternatives&issue=20111115
14. https://www.reit.com/news/reit-magazine/march-april-2018/maximizing-reit-returns
15. "Commercial Real Estate Investment: REITs and Private Equity Real Estate Funds" (September 2011) https://www.reit.com/sites/default/files/portals/0/PDF/Morningstar-Report-REITs-and-Private-Equity-Real-Estate-Funds-2011.pdf
16. Asset Allocation and Fund Performance of Defined Benefit Pension Funds in the United States Between 1998-2011, CEM Benchmarking http://www.greenstreetadvisors.com/pdf/GreenStreet-20141125-REITs_Win.pdf
17. http://blogs.wsj.com/developments/2014/09/04/report-finds-non-traded-reits-trail-publicly-listed-peers/
18. https://www.cambridgeassociates.com/benchmark/real-estate-2017-q1/
19. Larry Swedroe, The Role of REITs in a Diversified Portfolio, August 21, 2017 https://www.advisorperspectives.com/articles/2017/08/21/the-role-of-reits-in-a-diversified-portfolio
http://www.etf.com/sections/index-investor-corner/swedroe-reits-arent-special?nopaging=1
20. Brad Case, Comparing Average REIT Returns and Stocks Over Long Periods, April 20, 2016 https://www.reit.com/data-research/research/market-commentary/comparing-average-reit-returns-and-stocks-over-long-periods
21. https://www.financial-planning.com/news/overcome-client-risk-aversion-when-markets-tumble
22. Ronald Doeswijk, Trevin Lam, and Laurens Swinkels, Historical Returns of the Market Portfolio, November 11, 2017 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2978509
hat tip to Brett Arends https://www.marketwatch.com/story/spoiler-alert-reits-have-outperformed-stocks-for-the-past-50-years-2018-11-01
23. http://www.investmentnews.com/article/20150712/REG/307129996/no-reason-to-assume-reits-cant-thrive-when-rates-rise
24. https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
25. http://www.cnbc.com/id/46538421/Warren_Buffett_on_CNBC_I_d_Buy_Up_A_Couple_Hundred_Thousand_Single_Family_Homes_If_I_Could
26. Paul Saylor in Billionaire Hughes Chasing Blackstone as U.S. Rental King, February 13, 2013 https://www.bloomberg.com/news/articles/2013-02-13/billionaire-hughes-chasing-blackstone-as-u-s-rental-king
27. https://www.wsj.com/articles/wall-streets-big-landlords-are-so-hungry-for-houses-theyre-building-them-11546511401
28. http://investorhome.com/homerent.htm
29. Credit Suisse Global Investment Returns Yearbook 2012 https://research-doc.credit-suisse.com/docView?language=ENG&source=emfromsendlink&format=PDF&document_id=944857261&serialid=GWmBxAcmFYlxGe2svpGTrX4RH8hsfKCtYqlpfG7pFcs%3D
Monnery, Neil. 2011. Safe as Houses? A Historical Analysis of Property Prices. London: London Publishing Partnership 30. http://publications.credit-suisse.com/index.cfm/publikationen-shop/research-institute/credit-suisse-global-investment-returns-yearbook-2018-en/
31. Oscar Jorda, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan Taylor, The Rate of Return on Everything, 1870–2015 , The Quarterly Journal of Economics, August 2019
The final version is at https://doi.org/10.1093/qje/qjz012 or https://academic.oup.com/qje/article/134/3/1225/5435538
A prior version is at https://www.frbsf.org/economic-research/files/wp2017-25.pdf or http://conference.nber.org/confer//2017/SI2017/EFGs17/Jorda_Knoll_Kuvshinov_Schularick_Taylor.pdf
Some of the authors also have a related paper titled "The Total Risk Premium Puzzle" March 2019 https://www.frbsf.org/economic-research/files/wp2019-10.pdf or https://www.frbsf.org/economic-research/economists/oscar-jorda/
32. (Bava Metzia 42a) https://dafyomi.co.il/bmetzia/review/bm-rg-042.htm?q=0
33. Tim Gray also noted in "Real Estate Funds Have Been a Balm in a Stinging Market" in The New York Times on January 11, 2019 that 1) Morningstar found REITs returned 11.5% versus 10.2% for U.S. stocks from 1972 through 2018, and 2) according to Matthew Brancato at Vanguard, the S&P 500 includes 32 REITs accounding for about 3% of the index. https://www.nytimes.com/2019/01/11/business/real-estate-funds-balm-in-stinging-market.html
34. https://www.nreionline.com/reits/calstrs-500m-bet-reits-may-signal-wider-interest-pension-funds
https://www.reit.com/data-research/research/updated-cem-benchmarking-study-highlights-reit-performance
35. Princeton Economics Professor Discusses the Role of Real Estate in a Long-Term Investor's Portfolio REIT magazine 11/8/2019 https://www.reit.com/news/reit-magazine/november-december-2019/princeton-economics-professor-discusses-role-real-estate



     I am offering the online chapters of The Peaceful Investor using "The Honor System." If you don't plan to purchase a version of the book, yet you think it was worth your time and you learned a significant amount, you can tip or compensate me in a number of ways. This will probably not be tax deductible for you, but I will report and pay taxes on any payments.

  1. Paypal me at gkarz@aol.com
  2. Pay me by credit card. Email me (proficient at aol.com) with an amount you'd like to donate and I will email you an invoice via Square.com. I will not have access to your information - you would enter it on the secure square website.
  3. Before you make purchases at Amazon, link through one of my links. As an Amazon Associate I earn from qualifying purchases.
  4. Contact me to inquire about a review or second opinion of your finances.
If you don't think the material was worthwhile, I would appreciate emails letting me know what you read and whether you disagree with anything in particular. I would also appreciate anyone letting me know if they find any typos, mistakes, or suggestions how to improve the material.

Table of Contents and Launch Site

Last update 12/31/2019. Copyright © 2019 Gary Karz. All rights reserved.
Conditions and terms under which this information is provided.