Diversification within UK Private Real Estate Portfolios

Diversification within UK Private Real Estate Portfolios A Critical Appraisal of the Literature on Diversification within Private Real Estate Portfolios in the United Kingdom   Abstract One of the two major ways in which institutional investors can invest in real estate is private real estate. Private real estate is to purchase un-securitized real estate directly through property pools, commingled real estate funds (CREFs), syndications or separate accounts that are managed by professional real estate portfolio managers or investment advisors. This form of ownership will henceforth be referred to as private real estate. There are different drivers of investing within the private real estate portfolios, including markets, sectors, management, area/building specific, scale, diversification, liquidity, tax and governance risks. The private real estate has a low level of linear dependence on equity, so private real estate requires the diversification of its portfolios. This paper provides a critical appraisal of the literature on diversification within private real estate portfolios. Does a U.K. market need to do the diversification within private real estate portfolios when British people need it? Not really. Literature Review Investment in private real estate offers considerable advantages: it is a tangible asset with low volatility; and it generates an attractive income stream and long-term capital appreciation and particularly strong diversification benefits to stocks and bonds. Thus, there is extant literature showing that private real estate has a significant place in the U.S. mixed-asset portfolio: see Ziobrowski and Ziobrowski (1997); and Firstenberg, Ross Zisler (1998); among others. Researchers conducted several studies on real estates role as a component of asset-only portfolios, specifically focusing on real estates diversification benefits. These studies compensate for some of the issues with real estate data, in particular, that of valuation smoothing. Most of these studies conclude that the allocation to real estate should be from 10% upward. The results indicate that limited diversification benefits can be gained from international investments in pure office strategies, particularly for multi-asset investors seeking to reduce risk stemming from the capital markets. Existing empirical evidence is generally consistent with firm owners portfolio diversification having a positive impact on their firms risk taking (e.g., Amihud and Lev (1981) and Faccio, Marchica and Mura (2011)). The general theme in the existing literature is that firm riskiness can be reduced primarily by means of choosing safer investments, i.e. investments that result in lower cash flow volatility or stock return volatility (e.g., Lyandres, Marchica, Michaely, and Mura (2015) and Faccio, Marchica and Mura (2011)), or lower correlation with the rest of the firm decision makers cash flows (e.g., Amihud and Lev (1981) and Gormley, Matsa and Milbourn (2013)). The association between private (constrained) firm owners portfolio diversification and investment is negative and significant in most cases (Lyandres, Marchica, Michaely, and Mura, 2015). Lyandres, Marchica, Michaely, and Mura (2015) study possible endogeneity of firm owners portfolio diversification and of firms private status does not seem to drive their results. The inclusion of owner fixed effects does not impact the qualitative relation between owners portfolio diversification and private firms capital investment (Lyandres, Marchica, Michaely, and Mura, 2015). However, the fixed-effects results may still be affected by self-selection: better-diversified owners may select to invest in companies with higher investment rates, which better their risk preferences. Lyandres, Marchica, Michaely, and Mura (2015) suggest the firms capital investment depends on portfolio diversification of their controlling owners; the effect of owners portfolio diversification on firms investment levels depends crucially on firms financial constraints: the investment-diversification relation is positive for relatively unconstrained firms and is negatively for relatively constrained ones. Owner fixed-effects, a quasi-natural experiment, and instrumental variable analysis suggest that this result is not driven by potential endogeneity of owners diversification. A matched-sample analysis, selection model, and an alternative measure of financial constraints show that Lyandres, Marchica, Michaely, and Mura (2015)s findings are also not driven by the endogeneity of their proxy for financial constraints. The analysis builds on and extends that of Hoesli et al. (2004) but broadens the length of the time series and the depth of analysis as they pertain to the real estate portfolio. They concluded that both domestic and international real estate contribute with risk diversification, and therefore portfolio efficiency, to the multi-asset portfolio and that the data support an allocation to real estate of between 15 and 25%, depending on risk preferences and the investors country of domicile. The purpose is to investigate how the composition of a real estate portfolio affects the ability to achieve risk diversification when management costs are taken into account and after removing the assumption that investors can only by a real estate market portfolio. The analysis contributes to the body of knowledge by exploring how the type of underlying tenant demand type affects the portfolio composition problem for real estate investors and thus how real estate strategies should be fashioned to more effectively support overall portfolio objectives. Hoesli and Lizieri (2007) report correlations close to zero for private real estate in the UK. Lizieri (2013) finds that the correlation of the private real estate varies significantly over the market cycle, tending to increase in periods from 1995 to 2010 of poor stock market performance. Lizieri (2013) finds that the correlations of private real estate with equities and bonds changed in the last five years of the sample from around zero to 0.4 and -0.5 respectively. This would indicate that the diversification benefits from real estate disappear when they are most needed. However, it is also found that when the variance is decomposed, a high proportion of private real estate variance cannot be explained by wider capital market factors, which indicates substantial diversification benefits. Even though data construction issues for private real estate cannot be ruled out, Lizieri (2013) concludes that the results support the diversification role of the private real estate. Ang (2012) explores the characteristics of real estate in the context of its real asset characteristics along with real estates role in the asset allocation puzzle. Ang (2012) concludes that real estate is different from other asset classes in several respects: the idiosyncratic risk, the heterogeneity of the assets and requirement to actively mange real estate holdings. Ang (2012) also points out the difficulty of including real estate in any asset allocation model on par with stocks and bonds because direct real estate total returns are not returns in the same sense as are total returns for the other asset classes. This is because real estate total returns are not transaction based nor is there a way to measure the whole market. Ang (2012) does not say that real estate has no role to play but rather that the only return derived from real estate measured on the same frequency as the return on mature asset classes is the income return. Diversification of the Private Real Estate Portfolios with Equity REIT shares An examination of resulting efficient frontiers and their corresponding optimal portfolio weights across various levels of expected return reveals that the ability of public real estate to rebalance and diversify private real estate only portfolios, using either long or short positions, is very much in doubt (Seiler, Webb and Neil Mye, 2001). Private real estate helps reduce the risk of a portfolio because it has less than a perfect correlation with stocks, bonds and all other assets. Qualitative Analysis Standard Markowitz portfolio selection model assumes jointly normal and symmetric distributions. If that holds, then mean, variance and covariance are sufficient to define effective diversification strategy. Traditional diversification strategies no longer provide desired level of protection in bear markets. Portfolio risk and expected value fall in bear markets are systematically understated. Traditional notions of risk-return trade-off are systematically overstated. Frequent portfolio rebalancing needed to maintain target level of risk, leading to higher transaction costs. For example, Stichting Pensioenfonds X: Asset Mix is an archetypical private real estate portfolio. 9% property allocation is reasonable for a well funded and growing scheme if assume under-performs equities and out-performs bonds and adds some diversification. Higher portfolio diversification reduces the variance of owners portfolio return and its covariance with the firms cash flow. As a result, higher portfolio diversification of firm owner lowers the risk avoidance incentives and leads to increased risk taking by the firm. The direct effect of higher owners portfolio diversification on an unconstrained firms capital investment is through the reduction in the variance of owners wealth and the resulting decrease in his or her risk-avoidance incentives. A more diversified owner is less concerned with higher cash flow volatility resulting from higher operating leverage, and chooses a higher level of capital investment. The result is a positive relation between owners portfolio diversification and firm investment for unconstrained firms. The mechanism behind the negative relation between a constrained firms investment and its owners portfolio diversification is different. A constrained firm cannot increase its capital investment level in response to an increase in firm owners portfolio diversification, as its investment is determined by the investment capacity constraint. The only channel the constrained firm can use to alter its cash flow volatility is the riskiness of its investments. The scale/diversification of assets depends upon the genuine efficiency from scale, diversification and impact on equity rising and the decrease of the default. The portfolio of loans demands diversification during the debt and credit crisis. High correlation among portfolios means diversification across sectors relatively little impact on risk reduction in UK historically compared to specific risk. The degree of portfolio diversification of a firms controlling owner may influence its choice of riskiness of firm strategies. The reason is that an expected-utility-maximizing risk-averse owner takes into account the variance of the private real estates overall wealth when making decisions on behalf of the firm the CEO controls. Drivers of diversification from equities Drivers of rents Demand-GDP, business and financial services, consumer spending, distribution, general price inflation, technology, profitability and other investment sentiment drivers. Supply-Construction, planning, obsolescence Drivers of yields Interest rates/term structure, credit availability, credit sentiment (high grade versus low grade), property sentiment. Other factors Tax/political risks, property specific (e.g. lease structures) The earlier studies revealed real estate, with all its illiquidity, management intensity and information asymmetry, does exhibit characteristics that complement the multi-asset portfolio by contributing diversification (Lekander, 2015). But the findings go further to suggest that diversification objectives in low-risk overall strategies are best achieved via types of real estate in which the tenant demand is less affected by global factors, whereas diversification strategies for higher overall risk strategies are best supported by real estate strategies focusing on globally dependent real estate (Lekander, 2015). When accounting for the cost of liquidity, by defining the market value as the mean of the buyer reservation price distribution, a different return pattern emerges. This has implications on the correlation characteristics of real estate, reducing the real estates diversification potential. A similar bias affects investment indices through the population of transactions available to the appraiser to determine price evidence. As such, there is a risk that the return indices measuring private real estate performance are based on market evidence that suffers from selection bias and appraisal smoothing, thus skewing the characteristics of the private real estate returns. A form test of the superiority of economic-based diversification strategies for real estate portfolio diversification was undertaken by Mueller (1992). Mueller (1992) showed that a diversification strategy based on his own classification, which relies solely on economic base, provided even greater risk-adjusted return possibilities. Data and Quantitative Analysis Model The estimates produced and updated are based on a two-quadrant approach looking at private real estate (holdings of funds and other private investors) and private real estate debt (lending by banks and other institutions). I consider a situation in which a firms controlling owner is entitled to a proportion of the firms cash flow. In addition, the firms owner is endowed with initial wealth x outside of the controlled firm, which is invested in an imperfectly diversified portfolio with a normally distributed return, whose mean is and whose standard deviation is . Our model abstracts from the reasons for imperfect diversification of the firms owner, which is a feature consistent with the data. The focus is on the effects of imperfect diversification of owners portfolios on controlled firms investment strategies. I assume that the firms controlling owner is risk-averse and that the CEO maximizes the expected utility of his or her terminal wealth, . This utility is given by , where is the firm owners Arrow-Pratt coefficient of absolute risk aversion. Assuming that the firms cash flow (discussed below) is normally distributed, investors expected utility maximization simplifies into the mean-variance criterion: . The model shows that in order to understand the impact of firm owners portfolio diversification on firms investment strategies, it is crucial to consider simultaneous choices of both the level and riskiness of firms investments. The analysis focuses on the relation between owners portfolio diversification and firms investment level, extends and complements the existing literature that focuses on the riskiness of firms investment. The interaction between these two decisions results in a non-trivial and somewhat surprising relation between owners portfolio diversification and the level of her or his firms capital investment. Comparative statics Lemma 1: If the investment capacity constraint is not binding in equilibrium, then the firms equilibrium level of capital investment and its riskiness, and respectively, are given by the following system of equations: , subject to . I am interested in the effects of controlling owners portfolio diversification on the choice of the level and riskiness of capital investment of constrained and unconstrained firms. In what follows, we present comparative statics of the firms investment level and its riskiness with respect to the standard deviation of the owners portfolio, . I also graphically illustrate these comparative statics using the numerical example to help explain the intuition. Totally differentiating the unconstrained equilibrium conditions in (3) and (4) with respect to owners portfolio standard deviation produces the following result: Proposition 1 For a firm whose capital investment is unconstrained in equilibrium, , equilibrium level of capital investment and its riskiness, and respectively, are decreasing in the standard deviation of firm owners portfolio, . The owners objective function is: subject to Maximizing the owners expected utility in (5) with respect to , while assuming that the investment capacity is binding, i.e., that , leads to the following result: Lemma 2 If the investment capacity constraint is binding, , then the firms equilibrium riskiness of investment, , is given by the following equation: Data The UK data are from the Investors Chronicle Hillier Parker (ICHP) Index and comprise 32 semi-annual observations from 1977 to 1993. The UK data are available disaggregated by three property types (offices; industrial; and retail) and by 11 regions (London, South East, South West, East Anglia, East Midlands, West Midlands, Wales, Yorkshire and Humberside, North, North West, Scotland). The data exclude shopping centres, mixed use buildings, and business space. Data for the U.K. 11 regions were also aggregated to produce three super regions as suggested by Key et al. (1994). These regions are London, South and North. Quantitative Analysis Results The estimated correlation matrices for the three UK property types and three UK regions are shown in Table I and II. As the number of regions differs from the number of property types, there is no test for the UK 11 region data comparable with the one undertaken above. It is, nonetheless, informative to analyse this data. This is done by calculating the correlations between all market segments, in which a market segment is defined as one property type in one region. The full matrix is given in Table III. In the UK it is a conventional wisdom that retail property offers least scope for regional diversification: retail sales tend not to have strong regional differences and the supply response of the retail property market does not differ significantly across regions. In contrast, in the office market, as the London market is driven by the financial sector has a strong international dimension; opportunities should exist for regional diversification within the office market. Table I. UK correlations based on semi-annual returns for 11 regions and three property types (1977-1993) In conclusion, the results show that the scope for diversification within a region varies from region to region and is greatest the further from London, while the diversification within property type is generally limited but is better for office and industrial property. Retail property is poorly correlated with either industrial or offices. Thus, full diversification by both property type and region is to be preferred. Table II Insignificant correlations between market segments by property type, based on semi-annual returns, UK, 1977-1993 IPD/MSCI Data to Explore the Most Important Characteristics of Diversification in Private Real Estate MSCI IPD is the only global provided of appraisal-based total return indices for private real estate across a number of different geographical markets. In this subsection, we look at the main factors affecting the performance of financial investments, i.e. economic growth, inflation and interest rates. These are the most important characteristics in driving differences in performance across the private real estate market over the past few decades. Also, the impact of these factors is partially overlaid with endogenous dynamics of real estate markets resulting from lagged responses of supply and demand. This subsection mainly suggests a specific real estate factor may exist that drives real estate returns but is not common with the drivers of equities or bonds, indicating the existence of long-term diversification benefits of private real estate. Table III: Comparison of key statistics for selected total return indices in the UK UK (1990-2014, monthly) Average return Standard deviation Sharpe ratio Private RE (smoothed) 7.46% 3.76% 0.69 Private RE (unsmoothed) 7.46% 7.49% 0.37 Private Re (trans.-based) 10.39% 8.84% 0.06 Source: IPD and EPRA. IPD data available since 1987 but presented since 1990 to align with other indices. Sharpe ratio calculated relative to three-month T-bills. Table IV: Overview of average annual returns and volatilities for selected international private real estate indices Table IV summarizes the risk-return statistics of the IPD and NCREIF indices across a number of countries. Whilst we are aware that the statistical significance of comparisons based on only few observations is low, it is striking that the UK market is among the most volatile ones. The broad market opinion that the UK real estate market observes tends to see stronger cyclical movements. On the other hand, the UK private real estate market offers higher liquidity and market depth. Changes in the levels and volatility of returns from commercial real estate investments in the UK over a rolling ten-year view is presented in Figure 1. Figure 1: Rolling ten-year average returns and return volatilities in the UK The risk-return profile of the UK market shows a regime shift following the financial crisis. Also, for the UK, unsmoothed real estate indices show Sharpe ratios comparable or slightly above the levels measured for equity and bond indices. However, one needs to consider that risk-return profiles may not be stable over time. Also, the risk-return profiles of investments may be different for long-term investors, although there is no conclusive evidence that the reduction of the effective volatility should be higher for real estate than for other types of assets. However, the fact that a high proportion of the return is derived from income may indeed favor real estate in the long term. Real estate factor The existence of a specific real estate factor is highly relevant for the construction of investment portfolios based on fundamental factors. Recent research supports the existence of such a factor for commercial private real estate. In order to verify the existence of a real estate factor, I ran a factor analysis for the UK following the reasoning of Mei and Lee (1994). Monthly data were used in the UK. A higher absolute value for a loading means that the factor has a higher impact, positive or negative, on the returns of the index, while a value close to zero indicates no significant impact. Table 5: Factor loading of stocks, bonds and alternative real estate index returns Source: my own calculations. The highest absolute loading for each index has been highlighted in bold in Table 5. While the levels of the loadings are not directly interpretable, the regularity in their relative values is striking. Factor F1 loads highly on stock market indices and on pubic real estate indices. In fact, it appears to represent mainly listed real estate, while pure stock indices are also influenced by F3. Factor F2 loads very highly on all private real estate indices, both smoothed and unsmoothed, as well as transaction-based indices. Factor F3 loads most strongly on bond indices and to a lower extent on stock indices. It appears justified to label F1 as a stock market factor and F2 as a real estate factor, while F3 could be associated with monetary factors such as interest rates. The above results represent a strong indication that the factor that drives direct real estate returns may indeed differ from the one that drives the returns of equities or bonds. While it is impossible to conclude on t he basis of this analysis what particular risks or drivers this factor might reflect, they seem to be different to the risks and drivers behind the equities or fixed income, which should create diversification potential. Conclusion The sections above have provided a critical appraisal of the literature on diversification within private real estate portfolios. For the UK, the opposite result was obtained for retail property and diversification across both property types and regions was to be preferred for the other two property types. The results offer some insights into real estate performance and may offer some input into the determination of a diversification ion strategy for a real estate portfolio. There are two major qualifications on the results. The first is that they are historical results and they may not be a good proxy for the future correlations. Historical returns are unlikely to be a good proxy for future returns and that probably also holds for the correlations calculated between real estate categories. The second qualification is that investors have objectives, which are more complex than just the trade-off between the level of period return and volatility of period return. Behind the analysis of regional economic base is the reasonable presumption that similarity in economic structure and performance should lead to similarity in real estate performance. However, such analyses, which focus on demand proxies, ignore supply or, at best, assume no differences in supply responses across property type or region. Testing the economic base ideas with highly disaggregated returns data is therefore very important. The UK data allow comparisons of the economic similarity of regions and the similarity of property performance. It would then be possible to infer from the UK results whether the proxying of real estate performance with economic performance is valid and perhaps at what spatial scale. Table III Real Estate Portfolio Diversification References Amihud, Y. and Lev, B., 1981. Risk reduction as a managerial motive for conglomerate mergers.   The bell journal of economics, pp.605-617. Ang, A., 2012. RealAssets. Columbia Business School Research Paper No. 12-60.   Faccio, M., Marchica, M.T. and Mura, R., 2011. Large shareholder diversification and corporate   risk-taking. Review of Financial Studies, 24(11), pp.3601-3641. Firstenberg, P.M., Ross, S.A. and Zisler, R.C., 1988. Real estate: the whole story. The Journal of  Portfolio Management, 14(3), pp.22-34. Gormley, T.A., Matsa, D.A. and Milbourn, T., 2013. CEO compensation and corporate risk:   Evidence from a natural experiment. Journal of Accounting and Economics, 56(2), pp.79-101. Hoesli, M., Lekander, J. and Witkiewicz, W., 2004. International evidence on real estate as a   portfolio diversifier. Journal of Real Estate Research, 26(2), pp.161-206. Hoesli, M. and Lizieri, C., 2007. Real estate in the investment portfolio. A report for the   Investment Strategy Council of the Royal Ministry of Finance. Key, T., Zarkesh, F., MacGregor, B. and Nanthakumaran, N., 1994. Understanding the property   cycle. Main report: Economic cycles and property cycles. London: RICS. Lekander, J.R., 2015. Real estate portfolio construction for a multi-asset portfolio. Journal ofProperty Investment Finance, 33(6), pp.548-573. Lizieri, C., 2013. After the fall: Real estate in the mixed-asset portfolio in the aftermath of the   global financial crisis. The Journal of Portfolio Management, 39(5), pp.43-59. Lyandres, E., Marchica, M.T., Michaely, R. and Mura, R., 2015. Owners Portfolio   Diversification and Firm Investment: Evidence from Private and Public Firms. Mueller, G. and Ziering, B., 1992. Real estate portfolio diversification using economic   diversification. Journal of Real Estate Research, 7(4), pp.375-386. Seiler, M., Webb, J. and Neil Mye, F., 2001. Can private real estate portfolios be   rebalanced/diversified using equity REIT shares?. Journal of R

Purpose and Time Management

When purpose is not defined, abuse/misuse is inevitable' life would be lived to the fullest potential if its purpose is well defined. It does not only stop at defining the purpose of your existence, it is way more than that, you have got to have a ‘clear purpose'. A purpose driven life would definitely be an new of all eyes, such a life would affect and impart others positively and so also would be success personified.A life with a clear purpose would readily surmount challenges and turn them into gold mines, how you might want to ask? When you discover the purpose of your existence and stay glued to it, you have not only succeeded in winning your first battle in life, so also you have succeeded in separating yourself from the crowd, in that you know where your passion lies, you have discovered your potentials/ strengths/ capabilities and you would channel all you have got: your inner drive/ will power/ passion/ vision towards maximizing your strengths.Defining a clear purpose gets you only half way, you need stay within the confines of your purpose to get to the dream land, whereby oh can replicate success bearing in mind John Maxwell nugget- ‘ success without succession is a failure' .There are essential ingredients in staying aligned to the right path: focus would make you strong while weathering the storm of life because success comes at a price, good ideals will not make you lack encouragement while the struggle lasts because you are on a cause you believe in and it is a prize worth dying for, this in turn would make you resilient and you will never relent until you achieve your set goals. Time management is of most importance if you desire to leave your foot on the sand of time, you have got to get your priorities right, be assertive and do things as and when due.The only resource God has given all creatures in equal proportion is time knowing full well that we vary in potentials, motivation, encouragement to say but a few. If you maximize you r time to the fullest and see procrastination not Just as a thief of time but also as an enemy of destiny and progress, then you would not allow this vital resource escape from your grasp and management. Proper scheduling skills is important, coupled with adequate discipline, you will not allow events and circumstances to plan your time but vice versa will be the case, if and only if you have got the assassination that whatever takes your time, makes your life. Genius is 10% aspiration and 90% perspiration†. Time management requires discipline, focus, resilience, and it is painstaking, that I am not disputing, but with these inherent attributes, your equation of success is almost complete because the afore mentioned re core values of success and would help you up the ante of your accomplishment/ breakthrough/emergence/ victory by keying into this principle of management.Show me a man with adept time management skills and there you have got a man who can control all the other r esources required for success. A clear purpose plus proper time management will set you far above the crowd, time. Both run simultaneously, better put hand-in-hand and not independent of each other if ‘awesome success' that would bless and change lives even after you are long gone is all you crave for.

In Search of Your Own Identity Essay

After various writings by Richard Rodriguez and Octavio Paz, I have come across several realizations. Who am I? Should I be a part of a nation and a â€Å"system† that does not value me, or should I be a part of a nation that does not acknowledge my existence? The United States as a nation does not value me, and Mexico does not even know that I exist. These are difficult matters to discuss. We are all in search of our own identity. However, some of us are placed in a situation that makes it very difficult and confusing to know or understand. I have always asked myself, â€Å"Who am I? † I should put it in more crude words, â€Å"Where do I belong? † After this specific question is asked, I begin to realize that I have problems coming up with a response. My parents were born in Mexico, and thus, they are Mexican. Sometimes I feel I belong here in the United States, but other times I feel more attached to Mexico. I am a Mexican-American. However, I feel that I am denying in some way my heritage and my culture by saying that I am. I am denying my parents. I say that I’m Mexican because in a sense I am. I am also an American. I am a Mexican-American. What do these terms put together imply? They should imply that the person is Mexican and American. The term â€Å"Mexican-American† is the very reason why I find myself confused about who I really am. I need to search for my own identity, which leads me to the purpose of this essay. Rodriguez and Paz have discussed this particular problem of identity. All three have different viewpoints. Some of their ideas are similar but mostly contradictory, especially in the case of Rodriguez and Paz. As I was reading, I was able to relate to what they had to say, and in a much bigger sense, I was able to understand and know who I am. I was able to find my self. According to Paz, self-discovery is most than anything realizing that we are alone. Paz argues that our being or our identity becomes a problem and a question. It becomes a problem because of several reasons. We just don’t simply wake up one day and realize that we don’t know who we are. There are individuals who are placed in difficult situations that allow for these questions to arise. For example, the migration of Mexicans to the United States is a situation that will definitely cause many to question their identity. I agree because if we had not moved to the United States, I would simply consider myself a Mexican without a doubt. Paz strongly argues that different circumstances are likely to produce different reactions. This migration is a circumstance that will bring about confusion among the Mexicans about who they really are. It is ironic how a few miles can bring about such a change in you. Personally, I have experiences such a confusion by simply moving twenty miles North of where I lived. I lived in Reynosa since I was eight. Then, my family and I moved here to McAllen. At the beginning, you don’t feel quite like you fit. It makes it very difficult because it is a completely different world. Even though the majority of the people are of Mexican origin, it still makes it very hard. After the years, I became somewhat used to the life here and began to feel comfortable. However, I also began to question my identity. It is the moment we cross that border that we lose our identity. Paz argues that instead of asking ourselves questions, we should do something about it. We cannot go on contemplating who we are, rather, we should work with our situation and do something. Our questions are only an excuse for not facing reality. I agree with Paz because sometimes, we continue to complain and complain and simply think about our present situation. However, we do nothing to change it. I believe that Mexican-Americans need to stop talking about our injustices and discrimination and do something. However, Paz does mention that Mexicans have an inferiority complex. We begin to doubt our own abilities. This happens because of our culture. We are taught to listen and stay quiet. On the other hand, Anglo-Americans are taught to voice their opinions. There are many differences in both the Anglo-American culture and Mexican culture. These differences are the reason why it is impossible to blend or mix. We are brought into a culture that is the complete opposite of ours. This is the reason why Paz says that our â€Å"Mexicanism† simply floats. It never exists, and it never goes away. One of the ways we react to this situation is by flaunting our differences. Paz talks about pachucos. They are a group of people of Mexican origin that are known for their language, behavior, and clothing. I remember when I went to high school and we had a pep rally, which landed right on September 16, which is Mexico’s independence. A group of friends and I decided to wear red, white, and green to celebrate Mexico’s independence. We were simply proud of being Mexicans and wanted to show our pride. However, there were problems with several of the administrators because it wasn’t just my friends and I doing it, but other people as well. The pep rally was canceled because they felt that our clothing would distract and cause conflict with the other â€Å"American† students in school. As I was reading Paz, he mentioned that Mexicans dress a certain way to stand out. They know they are rejected by the â€Å"American† society. They do this to be different and stand out. The disguise is a protection because it hides and points them out. Somehow, they are doing this to â€Å"belong† in some way. They are able to catch the attention of the Anglo-Americans. I don’t agree with Paz. I believe that sometimes people dress a certain way to show their pride. I do not dress a certain way to be different and so people can notice me. I am proud to be Mexican and want to show it off. When fourth of July comes, I also like to dress in red, white and blue to celebrate America’s independence. Is this possible or am I being a hypocrite? This question leads me to Richard Rodriguez. Richard Rodriguez’ Hunger of memory is an autobiography. I was able to read only part of his book. I found it quite fascinating. Rodriguez goes through many problems of identity. He has mixed feelings about his own self. He mainly talks about affirmative action. What does the term â€Å"minority student† mean? Is it something we want to be classified as? I had an experience in high school in which a student denied a part of himself. His mother is Anglo and his father is Mexican. However, throughout school, when it was time to check on the ethnicity, he would check out Anglo. He did this throughout his years in school, but when it was his senior year something happened. He decided to go talk to his counselor and tell her to change all his paperwork. He no longer wanted to be classified as Anglo, but Hispanic. When I heard this, it was very surprising. I cannot understand how this particular person decided to simply become Hispanic just so he could get the benefits of affirmative action. He was applying to scholarships and various universities, and he knew that if he was classified as a minority student, he would receive better benefits. This is not right. You cannot simply choose to be Hispanic for your convenience. You should not reject a part of yourself simply for your own benefits. Rodriguez faced this dilemma. He knew that he did not want to be labeled a minority student, but if this is what was going to get him in society, then he simply had to accept. Throughout life, Rodriguez wondered about his identity. He was criticized by many because he was a well-known writer who was invited as a guest speaker. He would be around Anglo-Americans, and many criticized him because they felt he had become a part of them. Is this really true? Isn’t your identity how â€Å"you† see yourself? Just because other people see you being around another class or race of people, doesn’t mean that you have become a part of them. You simply know that you are Mexican, American, or Mexican-American, and blending with other cultures doesn’t necessarily mean you lose your true self. Because of affirmative action, Rodriguez was able to be a guest speaker, and a professor at a university. He felt threatened at times because the felt somewhat alienated by the â€Å"other† society. Rodriguez did not have a good relationship with the Chicano students. He felt threatened by them. These students were still attached to their parents’ culture. These students knew how to speak Spanish very well. They were proud of their past. Rodriguez on the other hand, spoke in English. His Spanish was not that well. He did not want to associate himself to a past that meant â€Å"poor†. There was one specific time when Rodriguez’ parents saw a Hispanic student wearing a sarape. They were very surprised. Rodriguez said that these students were foolish to think themselves unchanged by their schooling. I disagree with Rodriguez because I believe that just because you are getting a higher education and have a good job, you forget that you are Hispanic or Mexican-American. Rodriguez simply wanted to justify his own change. He did not want to belong or keep a bond between a past that did not bring fond memories. He was not as disadvantaged as other Hispanics. However, he felt very strongly about not going to Chicano student meetings or social events sponsored by â€Å"La Raza. † I don’t agree with him. After reading this, I realized that he is wrong. I am proud to be Mexican-American. I am proud to carry the term â€Å"Mexican† and â€Å"American. † I am proud of my Mexican culture, customs, and beliefs. I don’t need to change in order to succeed or attain a higher education. Rodriguez suddenly came to this realization. He could not simply cast out his culture and simply erase it. At some point, he had a discussion with his several Hispanic students in which he did not agree with them. Soon, he was known to others as being a â€Å"coconut,† brown on the outside, white on the inside. I have learned many things this semester. I had not really given much thought Mexican-American history. I never realized about the various things that were discussed. It was an eye opener. I was also able to realize of the many problems and injustices that Hispanics face here in the United States. However, just like Paz said, we cannot simply contemplate these issues. We need to do something about them. I am attending college to receive a higher education. I know that education is extremely important. However, I am not losing my identity by coming to college. Getting an education does not necessarily make you a different person. I don’t agree with Rodriguez’s viewpoint. After reading Paz and Rodriguez, I began to see myself in some of what they had to say. I realized that I have gone through a confusion stage. I sometimes don’t know where I belong or who I am. I have come to the conclusion that I am simply American. America is a nation filled with various ethnic groups. Hispanics include people from Mexico, Honduras, Puerto Rico, Nicaragua, etc. There are also many Asians. I often ask myself why people from Ireland living here in America aren’t labeled Irish-American. They are simply American. Why then should we be labeled Mexican-American? Cant’ we simply be called American? I have come to the conclusion that I am American. American can mean different things to different people. To me American means being a part of Mexico as well as the United States. I consider myself a lucky person. I am able to be have the best of both worlds: Mexico and the United States. Tomorrow, I will celebrate Mother’s Day here in the United States and Monday it will be 10 de mayo, Dia de las Madres in Mexico. My mom is very lucky. She gets two gifts. I don’t believe that I am being a hypocrite by doing this. These are some of the advantages of being American.

The Teacher Leadership Compensation Model Essay - 1245 Words

Review of Related Literature Chapter 2 provides a review of the literature pertaining to educational leadership, including general theoretical concepts of effective leaders, trends in educational leadership, effective personal leadership traits of school leaders, and the Iowa Teacher Leadership Compensation model. First, this review provides a foundation by examining theoretical concepts in general leadership theories. It focuses on historical trends in general leadership as we as general personal leadership traits of effective leaders. Next, this review provides an overview of educational leadership by examining trends in educational leadership, specifically the teacher’s role in school leadership, and effective personality traits of school leaders. It will focus on principal and teacher perceptions of effective personal leadership traits.Perceptions provide validity to an individual’s ability to lead others. Perceptions can often be a stronger indicator of a successful leader than the end product. The end product can often be affected by outside factors; perception is often a reflection of reality. Finally, chapter 2 will commence with an overview of the Teacher Leadership Compensation model as it pertains to evolving educational leadership. This state-funded leadership model provides compensation to teachers as a means of providing leadership opportunities and improving retention. Programs, such as this, provide guidance and opportunity to help continue the trend ofShow MoreRelatedSchool District Ca se Study Response933 Words   |  4 Pagestwelfth grade school of six hundred is beginning to feel the pressures of the media, the teachers’ association, and local parents concerning implementation of the school policies, training, compensation, and overall teaching expectations. This all stems from a recent state report card with less than stellar scores for this small town school system. Small County Consolidated School has been under the leadership of Ms. Wandan for the last seven years. Ms. Wandan has assisted in the school achievingRead MoreImproving Curriculum and Instruction in an Organization Essay examples722 Words   |  3 Pagesimportant that I model and demonstrate the same commitment to improving my knowledge based (4.1.3) around instruction and curriculum development. As the new accountability system – Smarter Balanced Assessment Consortium – approached, our district also launched its effort by helping teachers develop their own Core Curriculum using â€Å"spirals† – scope and sequence (standards based / aligned) and planning tool (curriculum mapping, weekly and daily plans) that require and promote teachers’ creativity andRead MoreEssay about Exploring the Possibility of Merit Pay for Teachers1277 Words   |  6 Pagesaward merit pay to teachers in an attempt to obtain and retain effective teachers as measured by st udent academic achievement. These proposals are supported by budgeted funding for the 2011 fiscal year with additional funding included in the optional, competitive 1.35 billion Race to the Top Fund. A number of different merit pay systems exist. Some reward entire schools or districts when passing rates on standardized tests are achieved, while others reward individual teachers for passing ratesRead MoreLet Me Teach You About My Career Essay1470 Words   |  6 Pagesentering college. When I begin my first years of Elementary school, I knew I had a passion for sharing my knowledge with teachers as well as fellow classmates. I was always eager to do tasks for my teachers. I would voluntarily take papers to the office, make extra copies of assignments, or easy things, such as scolding students to stay on task. I was the student who asked the teacher for extra book assignments at the end of the school year to keep me learning throughout the summer. Teaching is a nobleRead MoreThe School Of Education And Allied Professions867 Words   |  4 Pagesdirection.† Superintendent of Dayton Public Schools (DPS), Lori Ward, endorsed the WWTF program and provided Fellows opportun ities to complete student teaching requirements in select Dayton Public Schools. On the contrary, within the Department of Teacher Education professors and support staff approved the concept of the WWTF program, but struggled with implementation. As program director, Dr. Lasley utilized the symbolic and political frames to foster support during the program’s first year. ToRead MoreContributions of Teachers to Society1445 Words   |  6 PagesTeachers hold a very sensitive role in the modern civilized society. Regarded as social engineers, teachers possess immense knowledge on various issues that affect our daily lives as a community of human beings. Though in many countries including the developed ones, teachers are poorly remunerated they make invaluable contributions to their communities, to society and to the world at large, engaging in yeoman services with selfless love and dedication that could only be considered priceless. ThisRead MoreThe Evolution Of Education Takes Risk, Courage, Thoughtful Implementation And Support From All Stakeholders Involved1622 Words   |  7 PagesImproving schools takes knowledge, leadership and the ability to take the ideas of reform and make them impactful and lasting. For change to take hold and last over time there needs to be a sustainability and structures in place to ensure the long-term success of the adj ustments. Sustainable leadership requires authentic desire for students to engage in learning, while at the same time the teachers and administration continue to learn as well. â€Å"Sustainable leadership fully understands the nature andRead MoreSWOT Analysis: Speedy Bike Sales and Service1284 Words   |  5 PagesPoor ability to compete with faster moving competitors Eventual investment in some tech-based operations systems Innovation Visionary merging of business and social imperatives Need to stay abreast of changes in cycling production To define new model for improving cycling marketability Failure to generate community interest Community interest in such dual endeavors Social Family business with great community involvement Limited resources To improve community standing through active engagement Read MoreFinancing Funding And Student Achievement1651 Words   |  7 Pagesin many schools for the past decades. Incentive pay programs attempt to tie compensation to a teacher’s performance in the classroom and student achievement. The premise of this type of compensation relies on the initiative that teachers teach better when their efforts are recognized and rewarded monetarily. Klein (2015), thinks that incentive pay is a resource distribution strategy used in education to reward teachers for the outcomes they achieved (Klein, 2015. p.2). The problem that arisesRead MoreInstructional Strategies And Intrinsic Motivation Are Keys For Adjunct Faculty1274 Words   |  6 PagesA variety of specific self-regulation techniques can be available for teachers to consider when teaching students know how to control their behaviours. The teacher’s role will be to help students through the problem-solving process, t o develop self-regulation plans, to reinforce students for implementing their plans and to work with students to evaluate the effectiveness of their plans. Second strategy: Instructional strategies and intrinsic motivation are keys for adjunct faculty. Recent studies