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. The perspective of the analysis is
of an Australian investor investing in both the domestic market and the UK property market.
Several interesting results ensue including: the failure of the rule-based system to
significantly outperform the market or the random portfolios: the out performance of the rule-based
system over the market and random portfolios in terms of cumulative compounded and
dollar returns: and, most importantly the failure of hedging to secure a positive rate of return
to the portfolio.
