In my November 2025 asset allocation report, I was pretty candid about my skepticism toward real estate.
My portfolio was up 51% YTD, driven almost entirely by concentrated tech positions. I wrote that investing my real estate money into index funds would have “undoubtedly done better,” and that I “probably wouldn’t invest in future real estate deals” given the long hold times and modest returns.
My friend Shane Fuhrman, an investor and hospitality operator at Selwyn Capital, read that report and pushed back. His response was one of the most thoughtful defenses of real estate I’ve received, so I wanted to share it here.
Hi Nick,
I really appreciate you sharing your thoughts so openly. You make valid points, and many investors share your view. Real estate can feel slow and illiquid, especially when compared to public markets that show results instantly and fluctuate constantly.
I remain confident about real estate because its real compounding happens quietly. Equity builds through debt paydown and appreciation, even if that growth is not visible until a refinancing or sale. Illiquidity, while uncomfortable, is often what creates discipline and keeps capital compounding when public markets fluctuate.
Real estate also serves as one of the few true long-term hedges against inflation. Replacement costs rise, land stays scarce, and quality assets maintain purchasing power when other markets lose ground. Over long periods, real estate has consistently outperformed equities on a risk-adjusted basis because it moves through patient, durable cycles rather than emotional ones.
It is true that the past few years made real estate difficult, but that window does not define the asset class. When rates normalize, the value in well-positioned assets will become clear again.
It is possible to make much higher returns in actively managed equities, but that comes with more volatility. I also find exponential value in the hospitality businesses that our properties support. I enjoy directing my time, energy, and capital into ventures I care about that also generate strong returns, rather than focusing only on what might produce the highest financial outcome.
For me, real estate remains one of the best ways to balance wealth creation and preservation. It compounds quietly, rewards patience, and connects capital to something tangible and lasting.
If your strategy is working well for you, I would encourage you to keep going with it. I only wanted to share how I think about real estate and why it remains such a meaningful part of how I approach investing.
One line that stuck with me: “Illiquidity, while uncomfortable, is often what creates discipline.”
That’s a perspective I hadn’t fully considered. When your capital is locked up, you can’t panic-sell. That forced patience can be a feature.
The timing of Shane’s email feels relevant. Since I published that November report, my tech-heavy portfolio has given back a meaningful chunk of those gains. It’s a good reminder that concentration works both ways, and that the quiet, steady compounding Shane describes has good value.
I still lean toward my current strategy, and as of today, I’m deep-and-dirty with an 87% stocks allocation.
But I respect the argument. Shane’s framing gave me something to sit with, and I think it’s worth sharing with anyone else weighing the same tradeoffs between liquid and illiquid assets.