September 18, 2019

The Shape of the Yield Curve and Home Price Returns

An inverted yield curve is a negative indicator for stock returns, prompting risk aversion among market participants. As shown in the chart below, stocks perform poorly in environments of inverted yield curves. Housing on the other hand has not demonstrated a statistically significant relationship between the slope of the yield curve and returns.

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May 30, 2017

Are your nest eggs all in one basket? Managing concentration risk in personal wealth

The “optimal” investment portfolio for an individual will be dependent on a multitude of factors, such as the person’s age, salary, liquidity needs, specific financial goals, and risk tolerance. These unique, individual circumstances should dictate the asset allocation that will create an effective long-term plan for personal wealth management.

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January 20, 2017

Why institutional investors need to invest in residential real estate

With over $71 trillion USD in AUM, institutional investment is a core driver of the global economy. Institutional entities have the common objective of generating cash flows capable of fulfilling future obligations. These obligations fluctuate with respect to economic factors such as interest rates, inflation, and unemployment rates. The compounding nature of investment returns means that significantly more capital is required to fulfill a short-term obligation versus a longer term one.

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January 20, 2017

The Devil is in the details: risk and return in residential real estate

Residential real estate equity is one of the largest asset classes in the United States and is a significant proportion of the average household’s net worth. We study how diversified real estate indices lead to a dramatic understatement of the median homeowner’s portfolio risk (by a factor of 4-5x). Finally, we explore the value of an investable and diversified residential real estate index from the perspective of an institutional investor.

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