MacRo LTD Blog

Is Real Estate Still a Good Diversifier

The following is a news summation from article by David Lynn.

Frederick Commercial Real EstateAlthough the recent downturn of the real estate market has made investors more timid to take risks, investing in private real estate is still a smart move to help diversify portfolios. Private real estate reacts more slowly to the market changes, versus daily changes based on the stock market.

Article author, David Lynn writes, “The low or negative correlations of private real estate returns with returns of bonds, equities and public REITs suggest that it can be an effective diversifier, leading to lower volatility of portfolio returns and enhanced returns for a given level of risk. We believe that this is particularly important in an increasingly unpredictable global economy.”

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