As the future of the equity markets and economy becomes more uncertain, investors are increasingly flocking toward alternative investments to achieve a level of portfolio diversification that can withstand a potential recession. Real estate is one alternative asset that offers a low correlation to equities and can balance a portfolio. To learn more about real estate investments and how investors can utilize this asset to protect wealth, the Financial Post spoke with Sightline Wealth Management for insight.
“Looking back at most recent years and especially since the beginning of 2022, a traditional 60/40 portfolio may not work. When stocks and bonds are losing their value at the same time, investors may look to diversify beyond traditional investments and into alternatives such as real estate,” explains Sightline Senior Investment Advisor Martina Longauer.
While many investors may think tying up large amounts of capital in an investment property is the only way to gain real estate exposure, Longauer aims to expand the horizon of what investing in real estate means. This could include, but is not limited to, real estate investment trusts (REITs), mortgage investment corporations (MICs) and even investments in farmland. By selecting the right type of real estate investments, investors stand a better chance to receive fixed income and minimized volatility in their portfolios.
“Properly allocated real estate can offer welcomed portfolio diversification,” says Longauer. “By working with a seasoned advisor, investors can match their real estate investments to their appetite for risk, need for income and their investment time horizon.”
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