Private Real Estate – Part 2


Video Transcript

Hey folks. Ron Dickinson here at Dickinson Investment Advisors. I’ve put out other videos on investing in private real estate and why I like it, and it has attracted a lot of attention. So I want to give you some follow-up of what we’ve been doing.

Alternatives include real estate, business loans and infrastructure assets. Sometimes they could be in the public stock market, but I like the ones that are in a private market more because they don’t go up and down with the market.

So I have 30 percent of my assets now in those kinds of investments, and as I get closer to – for retirement age, I will probably move to 40-50%.

Now why is that? That’s because I like the steady returns they provide. I get monthly and quarterly checks and my portfolio isn’t going up and down with the market on a daily basis. So when I turn on the TV in the morning, it looks like a rough day. I can rest assured I’m not getting hit as hard as I might think in my mind I’m being hit.

Now there are some trade-offs to consider, and that’s if the market is really going up, I’m not going to be going up quite as fast either, but I traded that steady return for that.

They’re harder to understand and a little bit harder to comprehend, but we can build your financial plan around it. I’m gaining more and more experience in this area all the time.

As I mentioned, these investments are hard to understand, so I’ve been hitting the road. I’ve been out to three different investment conferences and company meetings and Dave has been out to four.

We’re trying to meet management face to face. We want to know if we can look them in the eye and trust who they are. We want to know if we trust their process that they’re using and if they produce the results that we’re looking for.

Now we can’t control all risk, but we can put in the work to mitigate it and decide if it’s the right thing for you. We do have a test around here: I will only offer an investment to you if I put my own money in it. So I have to get to a comfort level that I’m willing to stick it in my portfolio before I bring it to you, and I like to have it in there for awhile, so I can experience the good and the bad before I roll it out to all clients. We think we’re ready for that. I’ve rebuilt some portfolios that are 40% in real estate, 10% in business loans, and 50% in the stock market.

Now one thing you might notice from that portfolio that you might perceive to be less risk is there are no bonds, and that’s because right now we think bonds are really high risk. They’re not paying very much and they would lose principal easily. In fact the week after the past election, the 10-year Treasury bond lost 2% in one week. The third year, it lost 6% in one week. So that’s a risk we want to get away from.

Folks, we’ve been working hard on this. We can talk to you about it directly and show you some of the investments. I’m also going to have the portfolios rebuilt that we can talk to you about that. So we’re looking forward to these new portfolio designs.

Talk to you soon, folks. Thanks!


[Financial Planning and Investment Management Services offered through Dickinson Investment Advisors, Registered Investment Advisor.  Statistics and market information provided by Litman Gregory Advisor Intelligence.]

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