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ments Objective 2: Evaluate the advantages of real estate investments ? A possible hedge against inflation ? Easy entry as a limited partner, such as investing $5,000 to own part of an apartment building 1713 Advantages of Real Estate Investments (continued) ? Limited financial liability— limited partners ? No management concerns REITs, mortgages ? Financial leverage – Use of borrowed funds for investment purposes, allows you to acquire a more expensive property than you could buy on your own 1714 Disadvantages of Real Estate Investments Objective 3: Asses the disadvantages of real estate investments ? Illiquidity ? Declining property values ? Lack of diversification ? Lack of a tax shelter for real estate syndicates ? Long depreciation period ? Management problems—direct real estate 1715 Investing in Precious Metals, Gems, and Collections Objective 4: Analyze the risks and rewards of investing in precious metals, gems, and collectibles ?A hedge against inflation ?A safe haven during political or economic upheaval ?Need a storage place 1716 Investing in Precious Metals, Gems, and Collections (continued) ? Can be risky due to price variations ? Gold lower interest rates often result in higher gold prices – Bouillon bars and wafers – Gold bouillon coins – Gold stocks – Gold certificates 1717 Investing in Precious Metals, Gems, and Collections (continued) ? Silver, pla