The market is less efficient than other asset classes public information is more thinly spread and subject to less analysis and this opens up greater opportunities for adding value through research. While a medium-sized listed company may have hundreds of investment analysts scrutinising its every move, the same is not the case for a coffee shop in an obscure town. This argument suggests that the potential for finding genuinely undervalued assets is greater. Doing so, however, takes a substantial amount of knowledge and effort. The highly cyclical nature of the property market, and its tendency to lag other asset classes in the business cycle, also offers potential to exploit market timing.
Property has further attractions in terms of tax treatment, especially for medium-term investment.
And, finally, property is an invaluable diversifier, in part because of its place in the business cycle. Taking all the above into account, some exposure to property is a useful part of any portfolio. This is part of a series of extracts from Fortune Strategy the definitive guide, published by investor education in October 2000. To order a copy directly, go to our contributors or for more information on the book click here .