The Preservation of Capital

Paper Summary:

The paper reveals that real estate is the most advantageous investment because it tends to act as a counterweight to inflation, it is not normally effected by the conditions on Wall Street and it generates a higher yield than a savings account or bonds. The paper focuses on the use of real estate in a preservation of capital strategy. The research explores residential and commercial real estate, real estate investment trusts (REITs), real-estate mutual funds and home builder stocks. The paper discusses the manner in which they can be utilized in a preservation of capital investment strategy.

Outline:
Abstract
Chapter I: Introduction
Chapter II: Literature Review
Chapter III: Methodology
Chapter IV: Discussion, Conclusions and Recommendations

From the Paper:

"Preservation of Capital is defined as an investment strategy that has as a primary goal preventing the loss of the total value of an investment. The use of a capital preservation means that investors must guarantee their portfolios are generating a return that is at a minimum equal to inflation. The research also found that real estate serves as great portfolio investment because it is a counterweight to inflation. The literature asserts that most financial planners and investment managers alike recommend that individual portfolios consist of 5% and 20% real estate investment that does not include the investor's primary residence. In addition the research found that companies began increasing real estate investments in the 1980's and today a substantial percentage of many business investment portfolios are composed of real estate investment."

Sample of Sources Used:

• Ambrose, B. W., Highfield, M. J., & Linneman, P. D. (2005). Real Estate and Economies of Scale: The Case of REITs. Real Estate Economics, 33(2), 323+.
• Ball, M., Lizieri, C., & Macgregor, B. D. (1998). The Economics of Commercial Property Markets. London: Routledge.
• Barker, D., & Sa-Aadu, J. (2004). Is Real Estate Becoming Important Again? A Neo-Ricardian Model of Land Rent. Real Estate Economics, 32(1), 33+.
• Commercial Real Estate. . Retrieved April 7, 2007 from; http://financial-dictionary.thefreedictionary.com/Commercial+Real+Estate
• Financial & Investment Dictionary definition of Residential Property

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