Originally posted by @David Krulac:
On his current cross country tour, "The Burning Down The House Tour", no that's not the right name, that's somebody else's tour; its the "All Weather Tour"; says that real estate should NOT be part of your investment portfolio.
He says that your portfolio should look like this:
Stocks 30%
Medium Term Treasuries 15%
Long Term Treasuries 40%
Gold 7.5%
Commodities 7.5%
You'll notice NO real estate.
I was reading elsewhere that money market funds, bank CDs, and 30 day T-Bills have all failed to keep pace with inflation over the last 25 years.
And over the last 25 years inflation has averaged 2.2%, gold has averaged 5%, oil has averaged 6.5%, Bonds have averaged 7%, Stocks have averaged 9.6% and real estate has averaged 9.8%.
How many Bigger Pocket member's portfolio looks exactly like Tony Robbins?
I don't following his portfolio. I follow something similar to Betterment's allocation based on my risk profile.
I don't think your primary residence should be considered an investment because it isn't a productive asset. Owning property for rent that you can compare to other asset classes is more of an investment and less speculative. My guess is that real estate owners under appreciate the risk they are taking on by being under diversified, leveraged 5-20x and the transaction costs that come with unlocking equity.
At the end of the day everyone has different goals, timelines, liquidity, risk profile, etc.
http://www.thornburginvestments.com/pdfs/TH1401.pdf
