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Old 01-30-2012, 07:57 PM   #1
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Trying to learn about REIT funds. Is this a good time to buy into a fund and why or why not? Looking at Commercial REITs, especially health care.
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Old 01-30-2012, 10:42 PM   #2
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Not much help, I just use VNQ.
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Old 01-31-2012, 07:46 AM   #3
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American Association of Individual Investors January Journal has an article regarding the role of REITs in a individuals portfolio.

The Role of REITs for Long-Term Investors | AAII: The American Association of Individual Investors . I think you can join for free for two weeks or check to see if your library has the journal on hand.

Bottom line that I took away from the article is that REITS over the long term help portfolio performance and diversification. Over the short term, REITs correlation with stocks is very high so the benefits of diversification are not as great.
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Old 01-31-2012, 08:20 AM   #4
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I've been pleased with ARR. Low entry price and great dividend (11-cents a share)! The stock value has gone up the last few days so you may want to watch it for a week or two for a better entry point if you decide to buy it.
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Old 01-31-2012, 08:24 AM   #5
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FRESX seems to be making a comeback but divy has been low.
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Old 01-31-2012, 11:48 PM   #6
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I've thought about adding REITs to my portfolio - but then I think about the value of the real estate I own and the percent of my net worth that it represents - and then I decide that I'm already diversified in that area.
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Old 01-31-2012, 11:59 PM   #7
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I just sold NLY...when rates rise, this one will go down; I'll wait for a 5-10% pullback on this one. I have owned it for 1.5 years off and on and it pays a hefty 14-15% divy.

Just remember, I think they are taxed as ordinary income if I'm not mistaken, not long-term dividends.
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Old 02-01-2012, 06:49 AM   #8
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I just sold NLY...when rates rise, this one will go down; I'll wait for a 5-10% pullback on this one. I have owned it for 1.5 years off and on and it pays a hefty 14-15% divy.

Just remember, I think they are taxed as ordinary income if I'm not mistaken, not long-term dividends.
I sold it too. I think MREITs are being pushed higher by yield seekers. I am still holding RSO and a very small amount of ARR. Both are on the chopping block though. IMO now is not the time to go full in on MREITs. If you must, buy a small position now and wait for a significant pullback to add.
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Old 02-05-2012, 03:20 PM   #9
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Trying to learn about REIT funds. Is this a good time to buy into a fund and why or why not? Looking at Commercial REITs, especially health care.
Over the long run, REITs provide diversification (because of its modest correlation to total market) and income. However, CNN money says that to proceed with caution for 2012:
REIT investing -- Best New Money Moves - Feb. 1, 2012
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Old 02-05-2012, 04:02 PM   #10
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I have been DCAing into Vaguards REIT fund for about 5 years for diversity. I am beginning to feel its getting a little rich right now. However being the plodding type I'll continue to invest monthly in my ROTH and keep with the plan
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Old 02-06-2012, 12:01 PM   #11
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My annual rebalance in January took money out of my reits, which overperformed in 2011, and put money into emerging markets and international. Since then my reits have underperformed while emerging markets have overperformed. Rebalancing works! Who'd have thought? It seems that reits are now overvalued after last year. Now may not be the ideal time to start a new position in this sector.

I started contributing to a new fund in my Roth in January, and I was all set to pick a REIT, and then went with YAFFX instead, a large cap domestic blend (haha, that sounds like a wine).
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Old 02-06-2012, 12:25 PM   #12
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Be careful not to confuse equity REITs and mortgage REITs. The first owns and invests in property. The second invests in mortgages and uses interest rate spreads and lots of leverage to provide big dividends.
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Old 02-06-2012, 09:36 PM   #13
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My annual rebalance in January took money out of my reits, which overperformed in 2011, and put money into emerging markets and international. Since then my reits have underperformed while emerging markets have overperformed.
Vanguard REIT fund returns 8.85% YTD is not exactly under-performance even though emerging markets funds generates a higher return of 14.88%.

Quote:
It seems that reits are now overvalued after last year. Now may not be the ideal time to start a new position in this sector.
Are you implying that emerging markets are not overpriced then?
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Old 02-07-2012, 09:29 AM   #14
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The relative strength of the $REOPER (real estate operations) sector to the SPX index for the last 10 years has been in an uptrend.

Looking at the one-year charts show a more sideways but still performing well trend since August 2011 which I interpret as people are looking for the best dividends they can find. I have another chart that tells me institutional buying in the REITS for the last 8 weeks has been up pretty high some weeks and so-so other weeks. I suspect this means they are still putting money in this sector but that could always change next week :-)

Whether or not now is the time to enter, that's an individual choice.
good luck!
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Old 02-07-2012, 09:40 AM   #15
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Reit's are a great diversification tool. Individual Reits can be tricky. As others have mentioned VNQ is a great way to have the diversification of Reits without making a bet on any individual company.
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Old 02-07-2012, 10:31 AM   #16
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Vanguard REIT fund returns 8.85% YTD is not exactly under-performance even though emerging markets funds generates a higher return of 14.88%.

Are you implying that emerging markets are not overpriced then?
No, I don't think emerging markets are overpriced anymore. They were a year ago. I think they have adjusted and will have a good 2012.
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Old 02-07-2012, 12:34 PM   #17
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Do you own any REITS right now?

I happen to hold REITS as part of the total US stock market (VTI), I dont over weight or under weight really in REITS.

Many do look at REITS as a seperate asset class and I can buy some of that but they shure seem to move in lock step with the market.
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Old 02-07-2012, 11:09 PM   #18
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Do you own any REITS right now?

I happen to hold REITS as part of the total US stock market (VTI), I dont over weight or under weight really in REITS.

Many do look at REITS as a seperate asset class and I can buy some of that but they shure seem to move in lock step with the market.
I still have money invested in a REIT fund (VNQ) - 3%. VTI has about 2% REITs.
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