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The impact of housing on a homeowner's investment portfolio
Financial Services Review (2012)
  • Vivek Pandey
  • C. Y. Wu
We examine the inflation hedging and portfolio enhancing properties of residential real estate that makes up a significant part of the individual homeowner-investor's investment portfolio. Using 22 S&P/Case-Shiller city-level and composite indices, we show that residential real estate is at best a modest hedge against inflation. Adding residential real estate can potentially enhance the mean-variance efficiency of portfolios made up of financial assets such as stocks and bonds. However, to take advantage of the diversification benefits of residential real estate, homeowner-investors must rebalance their portfolios periodically, which may not always be a practically feasible option.
  • Impact analysis,
  • Investment plans,
  • Inflation,
  • Hedging,
  • Studies,
  • Housing
Publication Date
Citation Information
Vivek Pandey and C. Y. Wu. "The impact of housing on a homeowner's investment portfolio" Financial Services Review Vol. 21 (2012) p. 177 - 194
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