| The stock market
is coming off its worst week in five years. Even though over $500 million
was lost and the downward plunge meant over 4% of the value of the market
was gone in a week, market gurus call this a correction. Consequently, when
the real estate market slows and prices drop less than 2% over the course
of a year the media calls this a bursting bubble. The best way to add stability
to your investment portfolio is to add real estate to it. Page 109 of The
Millionaire Real Estate Investor, by Gary Keller, has a chart showing
standard deviations of various portfolio mixes. This measures the average
up and down fluctuations of a portfolio within just a year’s time.
The portfolio with all stocks fluctuates over 16% each year where as the
diversified portfolio with real estate in the mix fluctuates about half
as much or 8%. |
