REAL ESTATE INVESTING

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From aiCIO Magazine’s Winter 2011 Issue: A look ahead to 2012 on the topics of risk parity, real estate, low-volatility investing, LDI, and commodity investing. 

To see this article in digital magazine format, click here.
 

Harold Camping, perhaps the world’s worst prophet, inaccurately predicted the “End of Days� twice in the past 12 months. After his first failed conjecture, a billboard popped up in North Carolina: “That was awkward,� it said. 

We at aiCIO agree with that billboard, and think that credibility is lost after such horrifically inaccurate occurrences. Thus, our Year in Preview—in which we look at the viability of multiple investment strategies and options in 2012—showcases soothsayers on both sides of each debate. Like a savvy financier, we are hedging our bets to avoid becoming the Harold Camping of the institutional investment world. Clever, eh? 

The genesis of this feature emerged from discussions I’ve had throughout the year with chief investment officers, asset managers, and consultants. One complaint about the financial publishing industry is that it has its eyes locked firmly on the rearview mirror. Multitudes of websites in this niche industry of institutional investing report on who was fired, who was hired, what hedge fund is being investigated, and what investors did yesterday. Few look ahead and help investors discern what will come tomorrow. The purpose of this section, then—indeed, the purpose of all the magazines, conferences, and website that encompass aiCIO—is to help large capital owners predict what 2012 will bring. My only regret is that we couldn’t cover more than five topics within these pages. 

The strategies and investments included must meet a few criteria: They have to interest the Editor; they have to allow for honest disagreement and contention; and they have to scare at least some investors. We believe that we have fulfilled these criteria with our five topics: low-volatility investing, risk parity, real estate, commodities, and liability-driven investing. 

So enjoy our prognostications—or at least our attempts to discern what certain markets will do under certain conditions. If one of our contributors gets it right, kudos. If they get it wrong—well, perhaps we will soon be purchasing billboard space ourselves. 

—Kip McDaniel
 

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