Abstract:

This paper diversifies stock-bond portfolios with commercial real estate by utilising a ten year data retrieved from the Nigerian Property and stock markets. By the use of the tactical asset allocation strategy, findings showed that an inclusion of between 6.53% and 10.95% of direct commercial real estate in a mixed portfolio of ten stocks and bonds could yield an optimum of 70% and a maximum of 90% return over the study period. The study concludes that though, commercial real estate fails to fall within the efficiency frontier, its inclusion in stock-bond portfolios offered benefits for risk averse investors.