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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, 2017
3. July 19, 2017
4. July 25, 2018
5. April 26, 2018 April 21, 2017
6. May 7, 2019
7. September 13, 2019
8. July 11, 2018
12. David Robinson, "New federal tax rules create advantage for real estate investment trusts", June 18, 2019
15. "Commercial Real Estate Investment: REITs and Private Equity Real Estate Funds" (September 2011)
16. Asset Allocation and Fund Performance of Defined Benefit Pension Funds in the United States Between 1998-2011, CEM Benchmarking
19. Larry Swedroe, The Role of REITs in a Diversified Portfolio, August 21, 2017
20. Brad Case, Comparing Average REIT Returns and Stocks Over Long Periods, April 20, 2016
22. Ronald Doeswijk, Trevin Lam, and Laurens Swinkels, Historical Returns of the Market Portfolio, November 11, 2017
hat tip to Brett Arends
26. Paul Saylor in Billionaire Hughes Chasing Blackstone as U.S. Rental King, February 13, 2013
29. Credit Suisse Global Investment Returns Yearbook 2012
Monnery, Neil. 2011. Safe as Houses? A Historical Analysis of Property Prices. London: London Publishing Partnership 30.
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 or
A prior version is at or
Some of the authors also have a related paper titled "The Total Risk Premium Puzzle" March 2019 or
32. (Bava Metzia 42a)
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.
35. Princeton Economics Professor Discusses the Role of Real Estate in a Long-Term Investor's Portfolio REIT magazine 11/8/2019

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Table of Contents and Launch Site

Last update 12/31/2019. Copyright © 2019 Gary Karz. All rights reserved.
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