April 17th, 2009 | 
Author: The Primary purpose of this post is to demonstrate what kind of research supports the asset allocation decisions on the Market Decision Dashboard.
Doesn’t Real Estate ALWAYS goes up in price.
Wrong! During most of our lifetimes that has appeared to be true because of the constant debasement of the dollar by the Federal Reserve with the approval of congress (primarily responsible), the senate, the president and the “sleeping on the job” supreme court. But the chart below tells the real story in constant dollars.
The following chart is a constant dollar price chart published by Robert Shiller. The average constant dollar price from 1946 to 1998 was 111. The index started at 100 in 1890 and after the recent bubble blow off has dropped back down to 145. But it is still headed down. Dr. Shiller has indicated that Real Estate still has a lot more downside potential – risk.
That is why Real Estate still has a Red Light on the Asset Allocation Model. There is a time and a season for every investment. I will let my clients know when it is safe to get back in to the Real Estate water. 
PS: The Shiller Constant Dollar Residential Home stats and the Case-Shiller Housing indexes are only part of what is monitored to maintain an accurate Map of Real Estate. Every campaign requires an accurate map of the battlefield. This is one of the key pieces to success in battle according to Sun Tzu in the Art of War.
If you want a call when Real Estate gets the Green Light, email me:
Michael@fibonaccifinancial.com
PPS: Yes, I know Real Estate is a “Local Phenomenon”. Local market conditions are discussed with clients
PPPS: If you found this valuable or interesting PLEASE let me know !
Michael@FibonacciFinancial.com
Posted in Financial War Room | 
Tags: Financial Planning, Housing Bubble, Investments, Real Estate, Residential Housing
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