Investment diversification with/ without the bubble

[Joseph Diandrea]

Curious to see others portfolio diversification. Is it all real estate? If so different types of real estate as in commercial/ MF/SF/ mobile homes? Is some of your portfolio in stocks, bonds, etc? Also, how are you preparing for the burst? Curious to hear some thoughts.

[Andrew Johnson]

@Joseph Diandrea It's all in GOLD buried in my backyard!  Wait, no, that's not it.  In all seriousness, I'm mixed between commercial multifamily and equities.  I can take the bumps and bruises of a downturn in real estate and not completely implode.  I stress-test property financials before buying them to see how much "it can take" before I go from cash-flow positive to break-even.  But if there's is some monumental real estate bubble that bursts, I have no illusion that the money I have in the stock market or in bonds is going to "save me".  It's not like the 2007/2008 years were wonderful for stocks either.  Bonds look awful in terms of returns but would look "great" in the real estate and stock market crater.  So like most people I have some allocation there.  But still, in a crash those will still be tiny returns but look better than losses.  

If you really believe there is going to be a burst, sell now.  Go to cash.  Put everything on the sideline.  Maybe you go out and buy gold/silver/etc. and other vehicles that hedge (hopefully) your capital.  Wait it out and jump in when you think there's a bottom.  I don't think it's a great strategy and most of it's built on experts looking in the rear-view mirror.  You can't time the top and you can't time the bottom.  

I'm still waiting for the bubble-about-to-burst-person who relays that they've sold everything.  They have to be out there, I just don't see them here...