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Question

I learned a lot thanks to the Bogleheads. Are there any other ones here exploring diversification?

Steve Vaughan · Answer

Yep, lots of folks diversified into multiple streams of investing. Hands-off index funds or any quality MF should certainly have it's place in your nest egg, IMO. I was a hard core equity guy with a series-7 securities license back in the day. After several downturns I had no say in, I sought control over my investments and allocated most all of it to RE.

There are some great threads on the pros & cons of paper assets vs RE.

Welcome @Frank S.!

PS - @Michael Boyer - glad to be able to put a face to the name! I appreciate your posts and am glad to have you as well!

There are some great threads on the pros & cons of paper assets vs RE.

Welcome @Frank Sanchez!

PS - @Michael Boyer - glad to be able to put a face to the name!  I appreciate your posts and am glad to have you as well!

Frank S. · Answer

Great, it's good to see that "buy and hold forever" folks are around. As a neophyte RE Investor -actually, I'm still researching-, it seems there could be a good balance between both worlds. The main concern in RE seems to be the "recapture tax" while in index investing is "fees of fees".

Stay the course!

Best,

F

Edward B. · Answer

Stocks and bonds are much more efficient markets. Thus it is much more difficult to beat the average there on a consistent basis. Thus all of my stock and bond investing is through index ETFs. If I only invested in real estate as a portion of my overall asset allocation I would look to REITs or an index of REITs or some similar vehicle. Many index funds already have an allocation to RE so it may not even be necessary.

Having said that I am a firm believer in the opportunities available in the relatively inefficient real estate market. Here your hard work, knowledge, and due diligence can regularly earn you outsized returns.

Trevor Ewen · Answer

@Frank Sanchez

I definitely am, but I think we may be in the minority. A lot of real estate investors are hostile to institutionally and commercially available investment options. For what it's worth, they may be right.

I don't know the answer, so I split the difference between funds and physical assets.

The ease and liquidity of mutual funds and ETFs is very compelling when compared to owning physical properties. For me, this is a blessing. For others, this is a curse. Some people know that available money is like a loaded gun. For those folks, I recommend tying up money in longterm assets like real estate. For others, the practice of going against the market grain and disciplined fund investment provides flexibility and a nice hedge against the realities of real estate investment.

I don't expect a large cap ETF to gain 50% in appreciation over 5 years, and provide a nice tax deduction friendly asset. Likewise, I don't expect any funds to need the plumber to swing by and give them a good snake. It's nice to have both.

Michael Boyer · Answer

I love John Bogle and index funds, but in my short time on this forum, I think it is pretty core real estate, but there is some off topic and misc personal finance.

I think this is the most "active" investing in a way with a real hand in the result of how the flip or rental goes, but I suspect many are diversified into index funds, too...

Welcome...

Frank S. · Answer

Russell,

I can't use my foggy lenses to evaluate single stocks.   I don't trust fundamental analysis - forget about the technical storytellers.

I think that the  most importation part is to develop a plan and execute it according to one's asset allocation and risk tolerance.  It's easier said than done, we like to tweak and "fix" things.

Malkiel's classic, A Random Walk Down Wall Street does a great job covering systematic and unsystematic risks.

Bryan Hancock · Answer

I am a frequent poster on Bogleheads and think index investing is the only way to go for publicly-traded securities.  We use Fama/French three-factor portfolios through Dimensional Funds to construct our portfolios.

Bogleheads is a fantastic forum full of very smart people.  People from BP would be well-served to spend some time over there learning.  In general the folks on BP are not well-diversified and I think they do themselves a disservice having most or all of their assets tied up in one asset class.

Russell Brazil · Answer

I invest in the market, but Im not an indexer.  Much like with real estate investing I am looking at stocks through one of two lenses....cash flow or appreciation. So my portfolio is comprised of dividend stocks and growth stocks.

Frank S. · Answer

My equities and bonds are as exciting as watching paint dry. I love them.

Michael Boyer · Answer

Yes, indeed, some similarities, like you hear alot about passive income streams here, passive this and that, but I am going to shovel snow today, so there is nothing passive about real estate for me (as a hands on DIY lanldord, but I suppose some do farm out all management). Like the Vanguard paradox,  dyed in the wool index folks who also offer some active funds, you see some variation here both among investors and across markets, even some contrasting views...And, as mentioned above, part of the allure in RE is profiting by your own hand, inefficient markets, and higher returns....And I may be deranged, but I find it fun and engaging  and you get all sorts of challenges, good and bad (where all my index funds are pretty boring to look at even when they grow, but boring in a good way...)

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