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Re: Buy high,sell low
Old 04-12-2004, 02:19 PM   #21
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Re: Buy high,sell low

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1972-2002 efficient frontier curve and eyeballing:
<snip>
At first blush, REITS and stocks have similar SD's and reutrns - BUT no idea of correlation or what happens when you start adding bonds. And REITS haven't been around 100 yrs.
The short length of the data on REITs and the particular time period covered by that data (the home buying phase of the boomers) is my biggest concern with them. I might feel comfortable holding perhaps as much as 10% of them in my retirement portfolio but no more.
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Re: Buy high,sell low
Old 04-12-2004, 02:46 PM   #22
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Re: Buy high,sell low

I think REITS are run up, but I'm not sure the home buying thing scares me that much. With the vanguard REIT index, most of the top third of their holdings are office buildings, apartment buildings and storage facilities.

Oddly, I'd expect office building rents to have slid a little from 2000-2003, and apartment buildings to suffer as people moved to homes.

One thing thats a major eye-roller for me are the 'experts' who say if you have a lot of equity in your home, to not bother with REITS because you already have enough tied up in real estate. I wanna see one of them explain how a home in the Sacramento area correlates with apartment buildings in Los Angeles, office buildings in Manhattan and 10 acres of storage lockers in Memphis...
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Re: Buy high,sell low
Old 04-12-2004, 03:08 PM   #23
 
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Re: Buy high,sell low

Actually, I think there is something important here.
Even though I don't plan to invest in REITs, I have
considered it. But.............I am loaded with real estate
now, if that was a preferred avenue for diversification
I would be pretty well loaded up.

John Galt
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Re: Buy high,sell low
Old 04-12-2004, 10:47 PM   #24
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Re: Buy high,sell low

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. . . One thing thats a major eye-roller for me are the 'experts' who say if you have a lot of equity in your home, to not bother with REITS because you already have enough tied up in real estate. *I wanna see one of them explain how a home in the Sacramento area correlates with apartment buildings in Los Angeles, office buildings in Manhattan and 10 acres of storage lockers in Memphis...
I've never understood that advice either. It makes about as much sense as telling me not to invest in J C Penneys because I already have a lot of money invested in my clothes.
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Re: Buy high,sell low
Old 04-13-2004, 05:00 AM   #25
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Re: Buy high,sell low

WHY,why,why? Being left handed and INTJ - I bought Vanguard REIT Index because of Bernsteins - falling correlation article - as a counterbalancer for my Lifestrategy moderate(balanced index).

And then in 'hobby stock land' bought New Plan Reality as a DRIP dividend coumpounder when they had problems and were yielding 12% - as a reasonable speculation.

Now watching my tiny UDR (apartments) position as a contrary idea - as mentioned in TH's post apartments aren't doing well.

Back to why:

1. REIT index - 10-20% of IRA as a low correlation asset class.

2. Individual REITS as small spec.'s in my hobby stocks with div.'s to reinvest(DRIP's).
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