I'm with you, Al. I'd like to own a REIT index, and I will eventually, but not jhust now. Here's a passage from The Thing I Wrote For My Wife on this type of "portfolio regret":
"Note: I think that one of the greater vulnerabilities we face has to do with incorporating additional asset classes over time. Enthusiasm for a new (or old) asset class is never greater than at their peak valuations…by the time classes such as the REITs or Small Value indexes are recommended throughout the media (and internet boards) their prices have already moved up appreciably. It is a classic investor error to “chase performance” by buying in after prices have surged for a period of time. My plan to avoid falling prey to this tendency by holding off on incorporating an additional asset class until a number of years after they come to my attention, just to see if they still make sense to me after the buzz has died down. (this is where I am with the REIT indexes mentioned above…I think we ought to own them, and expect to at some point in the future, but I sure wish I’d figured that out 5 years ago when few people were chatting them up.)
The way I look at it is this: We’re looking at a ~50 year investment window, and our current degree of diversification is probably around 90% of what is possible – so if we’re a few years late in adding a relatively small allocation (~10%) to a new asset class and thereby improving our diversification incrementally, the difference in our long-term results is pretty small. On the other hand, if we repeatedly jump on asset classes while they are at the peak of their popularity, I think we stand a greater risk of buying in at peak valuations and riding them downward. The enemy of a good plan is the search for the perfect plan. A good plan will get the job done for us…constantly re-jiggering our portfolio in search of perfection is probably more apt to harm our long-term returns. "
Cb
but I'm not buying either. I'm new to all of this but a P/E ratio of 36.7 does not inspire wire transfers.
