Monday, July 7, 2008

All in all, it's still about the dirt

Here's a story about pension and endowment and other institutional investors looking toward so-called "next generation" investments. In short,

Investors already experienced with the traditional alternatives — private equity, real estate and hedge funds — are now open to newer alternatives such as real assets, infrastructure and 130/30 strategies, said John Garibaldi, managing director, heading the alternative strategies group at JPMorgan Asset Management, New York.
Yeah, let's take advantage of market disconnects and make lots of money. Sound like something you've heard before?

In short, what goes around comes around. And as catchy as some investments are, don't forget that there's no more dirt being manufactured in the world, unless you count land created by dikes.

Now, if you've gotten this far in the post, you'll find that I buried the lede, which is exactly what this story did imo. Get this:

Overall, 94% of all investors stated that real estate is meeting performance expectations compared to 92% for absolute-return strategies, 88% for private equity and 87% for hedge funds.
Is that because of low expectations, or misplaced expectations for other investments or because -- wait for it -- real estate is a fundamentally sound investment? Ding, ding, ding...good answer! I knew you'd get it right or you'd probably not be reading this post.

Hope you all had good holiday weekends. I did.

1 comments:

BawldGuy Talking said...

You consistently crack me up, while happily reminding me I'm not the Lone Ranger out there.

Imagine the concept of a 'fundamentally sound investment' coupled with the prudent use of leverage over time -- with the ability to defer capital gains taxes and shelter real time income almost at will.

Works for me. :)

 
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