Episode 406: REITs, Vacant Land, Bitcoin Today And Eh, Steve!
whatshot 18 snips
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!
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volunteer_activism ADVICE
REIT Selection Criteria
Prioritize REIT correlation with U.S. equities over yield history when choosing REITs.
Consider individual REITs for better diversification than REIT index funds like VNQ.
volunteer_activism ADVICE
Vacant Land Investing
Avoid vacant land investments due to illiquidity and speculative nature.
Prioritize income-generating, liquid assets for retirement portfolios.
insights INSIGHT
Bitcoin Promotion as Salesmanship
Michael Saylor's Bitcoin promotion is "talking his book," aimed at increasing MicroStrategy's value.
BlackRock's Bitcoin ETF recommendation serves their interest in promoting their product.
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In this episode, we answer emails from Spencer, Ko and Steve. We discuss REITs as a portfolio allocation, why vacant land is probably not a good investment for most people, "talking your book" with bitcoin for fun and profit and how it looks today in a portfolio, law school education and that infamous Cederburg paper (again but only briefly).
Ever caught yourself obsessing over a particular asset class? In this engaging episode of Risk Parity Radio, Frank Vasquez tackles three fascinating investment topics that challenge conventional wisdom while providing practical guidance for DIY investors.
We begin with an exploration of REIT allocations beyond the standard 10% recommendation. Frank breaks down why correlation with broader markets matters more than yield history, why individual REITs often outperform REIT index funds for diversification purposes, and why these investments belong in retirement accounts rather than taxable brokerage accounts. A listener's cautionary tale about vacant land investing serves as a powerful reminder that illiquid, non-income-producing assets can become financial quicksand rather than solid foundations for retirement.
The conversation shifts to Bitcoin's evolving role in investment portfolios. Frank cuts through the promotional noise from crypto evangelists, explaining how Bitcoin's behavior has transformed from a true diversifier to essentially "a three times leveraged QQQ fund" highly correlated with tech stocks. This critical insight helps investors properly categorize crypto within their asset allocation rather than viewing it as a separate diversifying asset class.
Finally, we examine the controversial academic paper promoting 100% equity portfolios for retirees. Frank exposes the significant limitations of this research, demonstrating why seemingly groundbreaking financial theories often collapse under real-world scrutiny. Throughout the episode, Frank's pragmatic approach reminds us that successful investing requires looking beyond popular headlines and understanding the fundamental characteristics of what we own.
Whether you're rethinking your REIT strategy, curious about crypto's place in your portfolio, or questioning conventional retirement wisdom, this episode offers clarity amidst the noise of financial media. Share your own investment questions at frank@riskparityradio.com and join our growing community of thoughtful DIY investors.
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