In what way can real estate serve a portfolio?

Real estate serves a portfolio as a tactical asset allocation by allowing investors to strategically include it in their overall investment strategy, aiming to optimize returns and manage risk. This approach involves adjusting the proportion of real estate exposure in response to market conditions or the investor's assessment of risk versus reward.

Tactical asset allocation can enhance diversification, as real estate often behaves differently from traditional equity and fixed-income investments, providing potential benefits when incorporated into the asset mix. For example, real estate could yield income through rentals and appreciate in value over time, contributing positively to a portfolio's performance, especially during certain economic cycles.

By allocating tactically to real estate, investors can take advantage of varying market conditions and potentially hedge against inflation, further enhancing their portfolio's resilience. This flexibility is crucial for adapting to changing financial landscapes and meeting specific investment goals.