{"id":934,"date":"2007-01-23T16:32:20","date_gmt":"2007-01-23T23:32:20","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=934"},"modified":"2007-01-29T06:47:34","modified_gmt":"2007-01-29T13:47:34","slug":"ask-the-broker-is-there-any-diversifying-alternative-to-real-estate-investing","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/934\/ask-the-broker-is-there-any-diversifying-alternative-to-real-estate-investing\/","title":{"rendered":"Ask The Broker: Is There Any Diversifying Alternative To Real Estate Investing?"},"content":{"rendered":"

Nick writes:<\/p>\n

Hi. I often scan your site and you seem to have collected a group of savvy and knowledgeable contributors. Here’s my question for you and them: What is the opposite of real estate? I know diversification is a smart strategy and many investors limit their risk by investing in something that flourishes when their main investment founders. Is there any sector or type of investment that traditionally performs well when real estate investments do poorly?<\/p><\/blockquote>\n

I disagree with your foundational premise. Diversification is for those who don’t know enough about what they’re doing. They fear loss of investment capital so they ‘balance’ each part of their portfolio with something that will generally perform better if their opposite does badly.<\/p>\n

It’s called Playing Not To Lose.<\/p>\n

Diversification is centered on risk and its reduction. I submit that your risk is greater or lesser based upon the degree to which you absolutely know what you’re doing in real estate. Let’s take an example.<\/p>\n

If a few years ago the investment choices in your local market were becoming less appealing, and you took the equity in your properties to Phoenix, how would your net worth look now? In 2003 in San Diego my clients were hard pressed to find units that still made sense on a month to month basis, and could be acquired with low down payments. They knew it would only get worse as prices continued to rise. (which they did of course)<\/p>\n

They didn’t look for something to balance this move. Phoenix now is in the middle of a correction and my clients are still doing just fine. They’ve increased their net worth significantly, and later this year or early in ’08, will take their increased equity and trade some of it to yet another growth region.<\/p>\n

The difference between those who stayed ‘safe’ in SD and those who took some or all of their SD equity to Phoenix is, in anyone’s judgment, staggering.<\/p>\n

Knowing what you are doing reduces risk.<\/em> Having generous cash reserves is what I’d recommend instead of putting a governor on your growth via diversification. I’ve included a link below which talks about Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Nick writes: Hi. I often scan your site and you seem to have collected a group of savvy and knowledgeable contributors. Here’s my question for you and them: What is the opposite of real estate? I know diversification is a smart strategy and many investors limit their risk by investing in something that flourishes when […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[12,8,5],"tags":[],"class_list":{"0":"post-934","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-ask-the-broker","7":"category-investment","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":939,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/939\/a-different-view-of-diversification\/","url_meta":{"origin":934,"position":0},"title":"A Different View of Diversification","author":"Cooksquared","date":"January 24, 2007","format":false,"excerpt":"Greg brought me on with the quote, \"I think you would be a good counterpoint to Jeff Brown.\" Well, I guess its time for me to start earning my keep. I fall on the opposite side of this diversification issue. The benefits of diversification outside and inside of real estate\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":961,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/961\/bloodhoundblog-week-in-review\/","url_meta":{"origin":934,"position":1},"title":"BloodhoundBlog week in review . . .","author":"Greg Swann","date":"January 28, 2007","format":false,"excerpt":"We had quite a week at BloodhoundBlog. If you haven't had a chance to stay abreast of the trail we're running, here's a summary of the week's most significant weblog entries. We added three new contributors this week, starting with real estate investor Michael Cook, who brought us The Right\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16100,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16100\/the-chupacabra-loch-ness-monster-and-the-most-rare-sighting-of-all-an-amazing-broker\/","url_meta":{"origin":934,"position":2},"title":"The Chupacabra, Loch Ness Monster, and the Most Rare Sighting of All; an Amazing Broker","author":"Cooksquared","date":"July 20, 2012","format":false,"excerpt":"It\u2019s been quite a while since I last wrote on Bloodhoundblog.\u00a0 It certainly doesn\u2019t mean that I have been absent; frankly, it just means I have been too busy to take 30 minutes and compose an interesting thought provoking piece of writing up to the standard we have all come\u2026","rel":"","context":"In "Innovation"","block_context":{"text":"Innovation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/innovation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":602,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/602\/ask-the-broker-who-is-responsible-for-the-mortgage\/","url_meta":{"origin":934,"position":3},"title":"Ask the Broker: Who is responsible for the mortgage . . . ?","author":"Greg Swann","date":"November 4, 2006","format":false,"excerpt":"Holy smokes! I get questions for appraisers, for inspectors, for real estate attorneys, for everyone involved in a real estate transaction except the ding-dong Realtor. Here comes a question for mortgage lenders, who are entreated to chime in with better answers:Generally speaking, are homeowners personally liable for their mortgage? If\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1260,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1260\/ask-the-broker-asks-the-audience-how-best-to-invest-an-unexpected-windfall\/","url_meta":{"origin":934,"position":4},"title":"Ask the Broker asks the audience: How best to invest an unexpected windfall","author":"Greg Swann","date":"April 3, 2007","format":false,"excerpt":"Another question requiring expertise far beyond a broker's license. Fortunately we have two great investment writers, three off-the-charts lenders and a readership of very prosperous people. Here's the problem:I have come into a situation, and was wondering if you could give me your opinion. I have recently come into an\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":448,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/448\/blogoff-post-71-ask-the-broker-so-what-about-the-swanky-house\/","url_meta":{"origin":934,"position":5},"title":"Blogoff Post #71: Ask the Broker: So what about the big, swanky Realtor’s house . . . ?","author":"Greg Swann","date":"September 26, 2006","format":false,"excerpt":"This is me, confessing:So you drive a crappy little car. Your real secret is that you live in a McMansion, right?Wrong. Our home would be described as modest -- if only it were bigger. We bought it for the dogs, more than anyone. It has many wonderful features that we\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=934"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/934\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}