Time to weigh up the long-term gain vs short-term pain

Current asset allocation decisions are either very difficult, or very easy, depending on your time horizon.

It is easy for strategic allocation because the long term fundamental advantages of certain assets over others are so compelling. At 7.6% the UK commercial property rental yield is attractive in absolute and relative terms. With the 10-year gilt yield at under 4% the yield spread (the commercial property yield less the 10 year gilt yield) is 3.8%, which is the highest level for over 20 years. If you are taking a long-term view with commercial property you will be attracted by these figures. But the short-term tactical allocation is difficult because the credit crunch has left ...