Stocks vs. real estate

A lot of folks contact us asking about buying real estate. “They’re not making any more of it. And it’s a hard asset,” they say. When we’re asked this question, we try to explain the advantages of owning stocks instead of or in addition to real estate. One way we do this is explaining how our portfolio managers pick stocks, and then comparing the costs of stocks to real estate. Picking stocks isn’t that different from looking for a good piece of real estate. First, you look at the quality (who built it, where it is, etc.). Then you figure out its worth, or valuation. Next up, you figure out your best- and worst-case scenarios for rent and taxes. (For stocks, you look at things called price-to-earnings ratios and cash flow return on investment). When the real estate is priced below your worst-case scenario, you buy it. That’s how it works with most stocks, too. There are, however, a couple of differences between real estate and publicly traded stocks, namely liquidity and low transaction costs. This ought to make real estate investors sit up and take notice. Let’s look at liquidity first. If you need cash, selling real estate may take

May 4, 2018 No Comments

Private prisons: Wrong at any price

By Fatima Iqbal, CFP® In late February, Attorney General Jeff Sessions reversed a Department of Justice (DOJ) plan to phase out the use of for-profit prisons. This boosted the stock prices of the two publicly traded for-profit prison companies in the U.S., Geo Group and CoreCivic (formerly known as Corrections Corporation of America), which had already seen their share prices soar since the November election of Donald Trump. Last August, we explained why Azzad chooses not to invest in the companies that operate those private prisons, a policy that we maintain today. At the time, Deputy Attorney General Sally Yates cited research showing that private prisons “simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs,” and “they do not maintain the same level of safety and security.” What we did not know then is that private prisons may be complicit in an even bigger problem: modern-day slavery. Recently, a federal judge ruled to allow tens of thousands of current and former detainees at an immigration detention facility run by Geo Group to join a class-action lawsuit alleging that they were forced to work for $1 a day or for

March 8, 2017 No Comments

Azzad’s real estate strategy ranked #1

We’d like to share some good news we received recently about one of the strategies in the Azzad Ethical Wrap Program. Last week, Azzad’s real estate investment trust (REIT) strategy was ranked #1 out of 52 REIT products for performance in the one-year period ending September 30, 2015. Informa Investment Solutions, the longest running investment manager database in North America, has recognized Azzad as a “Top Guns” manager for the performance of our REIT portfolio in the last three years. In addition to its #1 ranking in the REIT category, our REIT strategy ranked in the top 10 for the broader U.S. equity category for the one-year period ending September 30. This means it was among the top 10 best performers out of the 3,124 U.S. stock portfolios that Informa tracks. A highly concentrated portfolio, our REIT portfolio generally holds fewer than 25 stocks and is managed by an internal investment team at Azzad. After screening the REIT universe according to Azzad’s ethical criteria, the investment team employs quantitative criteria to assess a company’s future earnings growth potential. The portfolio is constructed with a bias to large cap REITs and was launched in 2004. I recommend that most people consider

November 25, 2015 No Comments