Risk Parity Radio
Episode 406: REITs, Vacant Land, Bitcoin Today And Eh, Steve!
Mar 13, 2025
This engaging discussion dives into the complexities of Real Estate Investment Trusts (REITs) and their essential role in diversified portfolios. It warns against investing in vacant land, highlighting the risks of illiquid assets. The conversation shifts to Bitcoin, exploring its new volatility and the implications for investors amidst corporate hype. Anecdotes and listener contributions add humor and depth, while strategies for managing portfolios, particularly in retirement, provide valuable insights. It's a mix of cautionary advice and insightful market trends!
28:14
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Quick takeaways
- REITs can enhance portfolio diversification, with a suggested allocation of up to 20%, focusing on individual stocks over index funds.
- Investing in vacant land is often speculative and risky, particularly for retirees, due to its lack of income generation and liquidity.
Deep dives
Understanding REITs and Their Role in Portfolios
Real Estate Investment Trusts (REITs) are highlighted as a potential component of a risk parity style portfolio, serving as both a stock alternative and a diversification strategy. The importance of selecting individual REITs, rather than relying on REIT funds, is emphasized due to varying concentrations in specific sectors like cell towers and data centers. Furthermore, it is noted that investors should focus on the correlation of REITs with the overall stock market, as many REITs can perform well when interest rates decline, contrary to traditional stock performance. The podcast also suggests that while a 10% allocation to REITs is often recommended, going up to 20% could be acceptable depending on the balance with other assets.
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