Thoughts on portfolio allocation in the face of risk?

[Andrew Eherts]

Hi All, I'm new to the forum and this is my first post. What a great community! I was researching strategies and attempting to formulate a solid way to diversify my future portfolio against market risk (and adjust to take advantage of opportunities). My findings are below, but I'd love to hear how you approach your purchase allocation so I have a better grounding. A paper by Joshua Gallin published in Real Estate Economics (The long‐run relationship between house prices and rents) was a great place to start, and the gist I got is that we can measure risk in the home ownership market using the price to rent ratios, much like we do in the stock market with price to earnings ratios. This is good insight I will use to determine how heavily I lean into purchase for resale and purchase for renting. Have you seen similar trends? I'd love to hear your thoughts! Best, Andrew