Alternative Investment

Need A Break from Stock Market Volatility? Passive Real Estate Can Provide Stability To Your Portfolio

Stock markets are more volatile than ever because of multiple overlapping macroeconomic and geopolitical issues. In fact, European Central Bank executive board member Isabel Schnabel has deemed this year as the “Era of Great Volatility,” given the seesawing market trends.

Major equity indexes, which reached record highs in July reversing the bearish trends observed earlier this year, took a turn for the worse yet again. Powell’s commitment to a hawkish stance stated in the Jackson Hole speech has increased investors’ fears. Powell said, “While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.” “These are the unfortunate costs of reducing inflation,” Powell continued.

The Dow Jones Industrial Average lost more than 500 points following Powell’s speech. In addition, the benchmark S&P 500 index is down 4.82% over the past month, while the tech-focused Nasdaq composite index fell 6.73%.

It’s Time To Look At Alternatives

Amid wildly fluctuating equities and surging commodity prices, investment bank Goldman Sachs recently said that the world is at an “inflection point.” As a result, the investing playbook, which delivered astounding returns over decades, has become less effective in recent times in the post-COVID-19 world. With profound changes in the way people invest, Goldman Sachs suggests that it is time for a new investing playbook to be formulated.

Passive Real Estate Investment – A Smart Choice

Real estate prices tend to rise over time, notwithstanding minor fluctuations. The average price of homes has risen since the pandemic, thanks to high housing demand amid lower interest rates and remote working trends. While rising mortgage rates have caused the U.S. housing market to cool off lately, real estate still seems to be one of the best alternative investment options for portfolio diversification and better-risk adjusted returns.

However, active real estate investments can be costly, as the median U.S. home price stands at $428,700 (as of the first quarter of 2022). Nonetheless, you can passively invest in real estate through residential and commercial real estate investment trusts (REITs) and crowdfunded real estate investments.

These investments not only provide passive income in the form of dividends or distributions but the value is tied to real property.

Today’s Real Estate Investing News Highlights

  • The CalTier Multi-Family Portfolio Fund recently completed a new investment in a portfolio of four multi-family properties consisting of 185 units. The CalTier Multi-Family Portfolio Fund is one of the few non-traded real estate funds available to non-accredited investors and has a minimum investment of $500. Year to date, the fund has produced an annualized cash-on-cash return of 7.02%.

  • The Bezos-backed real estate investment platform Arrived Homes launched a new batch of offerings to allow retail investors to purchase shares of single-family rental homes with a minimum investment of $100. The platform has already funded over 150 properties with a total value of over $50 million.

Find more news and real estate investment offerings on Benzinga Alternative Investments

Image by Stephan Walochnik on Shutterstock

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