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W hy Y ou Should Invest in Real Esta te

Nevertheless, I also own stocks, bonds, intellectual property, CDs, and
money market accounts. Even investors who love property as much as I do
should diversify their wealth among a variety of investments. You should, too.

If stocks better fit your personal investment criteria, then at least add some
real estate to your holdings. Your property investments will counterbalance
the cyclical, secular, and purchasing power risks that stocks force you to
endure. But don’t fall for the 5 percent to 10 percent real estate allocation

favored by the many financial planners who serve as lapdogs for Wall Street.
Over the long run, stock indexes may climb. Yet, contrary to Wall Street
dogma, stock prices can stay down for decades (even longer on an infl ation-
adjusted basis). Witness the periods 1907–1921, 1929–1953, and 1966–1982.
2
The time required for stocks to gain in value may outlast the years of your
retirement.
No matter what asset class you (or your advisors) like best, never place
3
more than 70 percent of your wealth into one asset basket. A mix of asset
classes may not enhance returns, but it does reduce risks. After you build your
net worth, spread that wealth among differing investments.

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