From: Dave Dodson 
Newsgroups: misc.invest.financial-plan
Subject: Re: Real Estate
Date: Sun, 2 Sep 2007 19:32:12 -0500
   posting-account=ps2QrAMAAAA6_jCuRt2JEIpn5Otqf_w0
	iQBVAwUARttWDPl/I4+O31e5AQE8HwH+PfA2Bai44qgPupII3arUrWtWBUMNaqc7
	OEYm4hJlCouTwQGh02YW4HfDmEKTq6eGRdIU6Q1rfle5zcnSNqTbGQ==
	=IPps
Bytes: 3114

On Sep 2, 5:54 pm, "wizard12342...@yahoo.com"
 wrote:
> Hi Dave,
>
> Thanks for your response.  Owning a home means you have a stake in a
> single piece of real estate.  If you own a real estate mutual fund
> [for example], you have an ownership stake in hundreds of properties,
> spread across the country or the world - and across the commercial and
> residential sectors.  So it seems that a fund offers much more
> diversification than owning a single home.  I tend to think of my home
> as a place to live, rather than an investment.
>
> But I follow your thinking.

Trade that $200,000 house from my previous example for $200,000 in a
real estate mutual fund and you have increased your diversification,
not across the economy, but within one sector of it. Keep your house
and replace a growth stock mutual fund with a real estate fund, and
you have decreased your diversification.

Dave