Real Estate
in a Diversified Portfolio
How does Real Estate fit into our portfolio?
At Lone Moon Capital, we believe in the role of both stocks and real estate in a diversified portfolio. The famed Nobel Prize winning Economist Harry Markowitz argued in his Modern Portfolio Theory that by diversifying investments with different risk and return profiles, investors can reduce risk without losing returns.
We advocate a 50-50 Stocks/Real Estate portfolio instead of a 50-50 Stocks/Bonds portfolio.
We believe that Real Estate can perform the same role as Bonds in reducing risk in a portfolio and yet Real Estate has produced higher returns than Bonds.
Real Estate provides current income as Bonds, also appreciation and tax reduction which Bonds does not provide except in the case of Municipal Bonds.
Which Real Estate Sector?
Multifamily is our Real Estate sector of choice due to housing being a necessity therefore it is more resilient against economic downturn. Vacancy risk is also spread across multiple tenants to achieve a historical occupancy rate of 90%+
Which Multifamily Strategy?
At Lone Moon Capital, we focus on Value Add multifamily properties where we believe with our operational excellence and hands on approach, we can add the most value and achieve higher than average returns for our investors through forced appreciation.
Source: Caliber Co
The number of renter households in America grew 1.9% year over year in the second quarter of 2024 to a record 45.2 million, according to a new report from Redfin. The annual growth rate is more than three times faster than the number of homeowner households, which grew 0.6% to a record 86.3 million.
Please visit our Multifamily Insights section to view our research on why we believe our chosen Sunbelt cities represent the best opportunities