Thank you. (REITs#1 at 9:21) REITs are the largest sector in my income portfolio, no interest in gold, have a little copper investment, no bonds except in a couple of CEFs, lots of SWAN stocks. I enjoy listening to and learning from your videos.
Papers about precious metals: "Because of the lack of such an income or utility stream, gold, silver, and diamonds appear to have been particularly bad long-term investments (at least if not held in the form of jewelry). Finally, durable assets are unlikely to be good inflation hedges, but they may still help diversifying a portfolio because of the imperfect correlations with financial assets." - The Long-Term Returns to Durable Assets (2016) Christophe Spaenjers "Over practical investment horizons, gold is an unreliable inflation hedge." - The Golden Dilemma (2012) Claude Erb & Campbell Harvey
Andrew, I can't speak for any of the experts but off the top of my head it may have something to do with some combination of: 1) The balancing benefit (or lack thereof) that REITs provide you with relative to other asset classes when put into a portfolio (for instance, bonds do much better job of balancing out the returns of stocks than REITs do). Obviously, this video was looking at each of these assets in a vacuum instead of how they would fit together with each other. 2) The diversification within many REIT funds being less than many broad-based stock funds (as I stated in the video many REITs focus on a small portion of the sector. And let's not forget that many broad-based stock market index funds include some weighting to real estate within them [it is one of the 11 stock market sectors after all]). 3) The fact that we don't have a ton of historical data to go on (I only managed to find index fund data back to the late 1990s when putting together this video, the rest were estimates from NAREITs) and that which we do have suggests a moderate excess benefit in growth for REITs over stocks (as opposed to an overwhelming edge that may make the costs/risk differences a no-brainer for many investors). 4) The tax and other cost considerations when comparing stocks and REIT funds (most of the popular stock index funds tend to be a little cheaper and more tax-efficient). 5) The fact that many investors do (or will) own a home whose value will already equate to a fairly good chunk of their overall net worth (so putting a ton of liquid investments toward REITs would leave those investors incredibly overweight in the sector). 6) Potentially something to do with conventional wisdom, familiarity bias, and/or concern over the reactions of clients following what happened during the Great Recession. Sometimes it can be seen as preferable to be wrong conventionally than wrong unconventionally. Their may be other reasons (and some of these may have nothing to do with it, again I can't speak for the experts), but that's just what came to mind off the top of my head.
@@NextLevelLife Some very valid points (as usual). I appreciate you taking the time to compose such a detailed reply and I look forward to your upcoming videos. They are honestly my favorite part of every Monday.
The question is whether inflation was really 3.9% on average or whether this is a scam and inflation was actually practically much - much - much higher.
Holy cow you are running out of topics... waste of time to watch. Also to ask for a like prior to even knowing the content of the video, what is that?!
Lol hater... For it being a waste of time, you wasted even more of your time bothering to write a comment, going out of your way to be negative. And every youtube channel asks for an early like. Is this your first time on youtube? Lol
So what was the one investment you rule them all?
Real Estate, only if you have the capital to enter it tho.
Thank you. (REITs#1 at 9:21) REITs are the largest sector in my income portfolio, no interest in gold, have a little copper investment, no bonds except in a couple of CEFs, lots of SWAN stocks. I enjoy listening to and learning from your videos.
Papers about precious metals:
"Because of the lack of such an income or utility stream, gold, silver, and diamonds appear to have been particularly bad long-term investments (at least if not held in the form of jewelry). Finally, durable assets are unlikely to be good inflation hedges, but they may still help diversifying a portfolio because of the imperfect correlations with financial assets." - The Long-Term Returns to Durable Assets (2016) Christophe Spaenjers
"Over practical investment horizons, gold is an unreliable inflation hedge." - The Golden Dilemma (2012) Claude Erb & Campbell Harvey
I love the title! Interesting video!
Glad you liked it!
Chillax Smeagol
This really had me scratching my head wondering why most "experts" recommend only investing up to around 10% into REITS.
I think it's due to most experts and consensus opinion being very in favor of bonds. It's always compared to an alternative
Andrew, I can't speak for any of the experts but off the top of my head it may have something to do with some combination of:
1) The balancing benefit (or lack thereof) that REITs provide you with relative to other asset classes when put into a portfolio (for instance, bonds do much better job of balancing out the returns of stocks than REITs do). Obviously, this video was looking at each of these assets in a vacuum instead of how they would fit together with each other.
2) The diversification within many REIT funds being less than many broad-based stock funds (as I stated in the video many REITs focus on a small portion of the sector. And let's not forget that many broad-based stock market index funds include some weighting to real estate within them [it is one of the 11 stock market sectors after all]).
3) The fact that we don't have a ton of historical data to go on (I only managed to find index fund data back to the late 1990s when putting together this video, the rest were estimates from NAREITs) and that which we do have suggests a moderate excess benefit in growth for REITs over stocks (as opposed to an overwhelming edge that may make the costs/risk differences a no-brainer for many investors).
4) The tax and other cost considerations when comparing stocks and REIT funds (most of the popular stock index funds tend to be a little cheaper and more tax-efficient).
5) The fact that many investors do (or will) own a home whose value will already equate to a fairly good chunk of their overall net worth (so putting a ton of liquid investments toward REITs would leave those investors incredibly overweight in the sector).
6) Potentially something to do with conventional wisdom, familiarity bias, and/or concern over the reactions of clients following what happened during the Great Recession. Sometimes it can be seen as preferable to be wrong conventionally than wrong unconventionally.
Their may be other reasons (and some of these may have nothing to do with it, again I can't speak for the experts), but that's just what came to mind off the top of my head.
@@NextLevelLife Some very valid points (as usual). I appreciate you taking the time to compose such a detailed reply and I look forward to your upcoming videos. They are honestly my favorite part of every Monday.
@@NextLevelLife the top of your head was 5x what I could come up with after a month (just assuming)
Great, perspective on broad asset classes as a whole.
Glad you enjoyed it!
I'm really enjoying your content and I am curious to know what your personal asset allocation is. Could be a topic for a future video
Thanks for writing down your numbers and giving their rank, that is really helpful for understanding the video!
Glad it was helpful!
Hey man... Don't do click bait... that's the best way to lose long term viewers like me.
The question is whether inflation was really 3.9% on average or whether this is a scam and inflation was actually practically much - much - much higher.
Holy cow you are running out of topics... waste of time to watch.
Also to ask for a like prior to even knowing the content of the video, what is that?!
Lol hater... For it being a waste of time, you wasted even more of your time bothering to write a comment, going out of your way to be negative. And every youtube channel asks for an early like. Is this your first time on youtube? Lol