Flagship Portfolio
Real estate has always been one of the best ways to make a fortune in the United States and, indeed, in most of the world.
Almost 20% of the billionaires on the Forbes 400 became part of the super-rich because of real estate.
Real estate is a cornerstone of wealth for the rest of the super-wealthy too, with almost all of them having significant real estate holdings in their portfolios.
The latest study from CEM Benchmarking, a pension investment consulting firm, shows that listed real estate outperformed every asset class except private equity from 1998 to the end of 2021.
Given all that, you probably won’t be surprised by what I say next: I think most investors should have a lot more of their money invested in REITs than traditional allocation models suggest.
In this total return REIT portfolio, we are looking for REITs with solid fundamentals that are deeply undervalued. So let’s take a look at the current REITs portfolio:
The Flagship REIT portfolio (updated as of 9/6/2026) enters the Fourth of July week with 20 positions across 8 property sectors, 11 rated BUY and 9 rated HOLD, and a weighted average yield that your editor finds genuinely respectable given where credit spreads are sitting. The ICE BofA High Yield Master II remains deep in Nirvana territory at 263 basis points, which means the credit environment is about as benign as it gets. That is good news for income-oriented portfolios and somewhat inconvenient for value investors who prefer to buy things when they are on sale.
The portfolio reflects that tension directly. The BUY-rated names are trading at a weighted average P/NAV well below 1.0, which means the market is still offering meaningful discounts to estimated asset value in those positions. The HOLD-rated names have largely closed that gap or exceeded it. We are not selling the HOLD names simply because they have appreciated; we are holding them because the businesses remain sound and the income is doing what income is supposed to do. We are not adding to them because the margin of safety has compressed.
That is the discipline in action. Buy at a discount to intrinsic value. Hold when fairly valued. Add when the discount returns. Do not chase yield into names where the valuation no longer supports the risk.
What follows is the complete portfolio review, organized by sector, with individual notes on each position.
This is the part that matters.
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