In Short
Real estate is an asset class with its own unique curve. It has advantages and disadvantages when compared to stocks. It should be a part of every portfolio.
What is Real Estate?
Real Estate is land and the property that people can live and/or work in.
Advantages Compared to Stocks
It is an asset that historically has always had value. It likely always will. It has a different value curve than stocks (it goes up and down and different times), which means adding it to a portfolio diversifies out risk.
Disadvantages Compared to Stocks
The main disadvantage is that it’s illiquid. It takes a lot of time to buy or sell a piece of real estate. Also, the transaction costs are very large. There are also maintenance costs.
In Conclusion
It has advantages and disadvantages. I believe the disadvantages can be addressed by investing in REITs (Real Estate Investment Trusts), which is a collection of properties (a mutual fund but with real estate). I believe due to the advantages and the addressable disadvantages, real estate should be in every portfolio.
Fee Structure
| Rate | Assets Under Management |
| 1.44% | Below $125,000 |
| 1.00% | Between $125,000 and $750,000 |
| .85% | Between $750,000 and $1,250,000 |
| .80% | Between $1,250,000 and $1,750,000 |
| .75% | Between $1,750,000 and $2,500,000 |
| .70% | Between $2,500,000 and $3,250,000 |
| .65% | Between $3,250,000 and $4,250,000 |
| .60% | Above $4,250,000 |
A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.
As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. If you would like to submit a post to my blog, please contact me.
If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.
E-Book Download
Questions for the comments
Did my explanation make sense? Do you agree or disagree with what I said?
