The Rewards of Multiple-Asset-Class Investing

Gibson, Roger C.
July 2004
Journal of Financial Planning;Jul2004, Vol. 17 Issue 7, p58
Academic Journal
This article focuses on the rewards of multiple-asset-class investing. A more contemporary translation of the idea of such kind of investing is that every investor creates a diversified portfolio that allocates one third to real estate investments, one third to common stocks, with the remaining one third allocated to cash equivalents and bonds. The overall portfolio balance is one-third fixed income investments and two-thirds equity investments. Diversification across two major forms of equity investing with dissimilar patterns of returns further reduced the equity risk. The result is a balanced portfolio, tilted toward equities, appropriate for an investor with a longer investment time horizon who is simultaneously concerned about risk and return. Such is a remarkably elegant and powerful asset allocation strategy. Allegedly, democracies and free enterprise have replaced many of the world's dictatorships and centrally directed economies. New capital markets are forming, and investment alternatives have proliferated.


Related Articles

  • The Stock-REIT Relationship and Optimal Asset Allocations. Waggle, Doug; Agrrawal, Pankaj // Journal of Real Estate Portfolio Management;Sep-Dec2006, Vol. 12 Issue 3, p209 

    In this paper, the marginal effects of changes (due to non-stationarity or estimation errors) in the REIT-stock risk premium and the REIT-stock correlation on the optimal portfolio asset mix of REITs, stocks, and bonds are determined. Employing a mean-variance utility function and considering...

  • Who's in charge? Freeman, Peter // Money (14446219);Nov2005, Issue 10, p28 

    The article provides options for investing in shares, property or other assets in Australia. Direct investments in shares and property can offer investors an absolute control over their funds. Investing directly in managed investments is expensive. Managed funds and shares using a wrap service...

  • Asset allocation: investing by the numbers. Selengut, Steve // Hudson Valley Business Journal;4/21/2008, Vol. 19 Issue 16, p4 

    The article offers information about the investment planning tool Asset Allocation. It is stated that Asset Allocation is a tool that allow investors to structure the investment portfolios that would achieve the goals established for each portfolio and for the investment program. Moreover, it is...

  • New Investments Approved in NJ. M. S. // Investment Management Weekly;2/25/2008, Vol. 21 Issue 8, p4 

    The article reports that the New Jersey State Investment Council has approved putting up to $500 million in commodity-linked notes. The council also approved an investment of $100 million in Pershing Square Capital Management's Pershing Square II along with a private equity investment of the...

  • Managing a Portfolio through Transition. Benz, Christine // Morningstar Practical Finance;Jun2008, Vol. 4 Issue 6, p10 

    The article discusses the performance of the portfolio of a person named Alan. The author examines the previous portfolio of Alan, in which some of custom plans of Alan offer exposure to top-flight managers at a reasonable cost. It notes that Alan's overall asset allocation includes healthy...

  • Safer than houses.  // Fund Strategy;6/4/2012, p1 

    The article offers information on growing investment in commercial property. It states that commercial property has always been used as one of the classic asset classes in a diversified portfolio. It mentions that its lack of correlation with assets such as equities and fixed income gives...

  • St. Paul Teachers Cautious On Real Estate. Neel, Dan // Investment Management Weekly;6/23/2003, Vol. 16 Issue 25, p2 

    Focuses on the decision of the Saint Paul Minnesota Teachers' Retirement System to postpone it search for a real-estate manager to oversee its asset class in 2003 in the U.S. Estimated value of the real-estate account; Reasons of the board for embarking on the real estate investment;...

  • Different Strokes. Korn, Donald Jay // Financial Planning;Sep2007, Vol. 37 Issue 9, p135 

    The article focuses on the benefits of noncorrelated asset allocation amidst market volatility. Based on a correlation analysis of 10 asset classes made by economist Michele Gambera, real estate investment trusts had low correlations to stocks. PMFM senior portfolio manager Greg Morris notes...

  • Economic benefits and determinants of extreme dependences between REIT and stock returns. Huang, Meichi; Wu, Chih-Chiang // Review of Quantitative Finance & Accounting;Feb2015, Vol. 44 Issue 2, p299 

    The study delivers new implications for risk management and asset allocation by investigating extreme dependences between real estate investment trust (REIT) and stock returns, where 'extreme dependences' refer to cross-asset linkages during extraordinary periods. It primarily differentiates...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics