Abstract:
This paper examines whether a rule-based expert system is capable of outperforming the
general property market, as well as randomly constructed portfolios from the market.
While neural network expert systems have been used in property research, there appears
little in the literature on the application of rule-based expert systems. Secondly, the
paper considers whether there are benefits to international investment in real estate
securities. The perspective of the analysis is that of an Australian investor investing in
both the domestic market and the UK property market. Several results ensue including
the failure of the rule-based system to significantly outperform the market or the random
portfolios on a risk-adjusted returns basis, and the failure of hedging to secure a positive
rate of return to the portfolio.
