Time to dump REIT??

Spanky · 12-21-2004, 01:57 PM

As interest rates rise, the housing sector may suffer because of reduction in money supply while price of housing continues to increase faster than incomes.

It seems prudent to dump REIT now. Any opinion?

12-21-2004, 02:15 PM

Seems prudent to me, but it also seemed prudent to me last year for the same reasons.

Since I got 'religion' I invested in Reits last February. My guts told me not to. YTD it is my best performing asset class - up over 20%

- What do I know

BigMoneyJim · 12-22-2004, 04:57 AM

That makes sense, but I've done just the opposite. I bought into REITs about a month ago to the tune of 12-13% of my portfolio. (Was aiming for 10% but goofed the online transfer, and there's a 1% redemption to withdraw funds before a year is up.) I figured it was probably a bad time, but so far I've been determined not to market time but to purchase based on my long term strategy. I finally got comfortable enough with VGSIX and decided to diversify some more for the long haul.

I'm no REIT expert, but from everything I hear I don't see much reason for it to keep going up in the near future.

brewer12345 · 12-22-2004, 07:17 AM

Looks a lot to me like REITs are overvalued. I helped my MIL set up her portfolio earlier in the year when she retired (this is all gravy money, the pension is more than she can spend) and we chose a 10% REIT allocation. When I go over it with her during the holidays, I am going to recommend that she sell down (from ~12% now) to 5% and make a 5 to 7% allocation to commodities.

charlie · 12-22-2004, 09:56 AM

I was fortunate to get into REITS during the slump
in the spring. I will rebalance in January to 14.3%
of my stock allocation in my 60/40 "coffeehouse"
IRA.

Cheers,

Charlie

AltaRed · 12-23-2004, 01:00 PM

The REIT I bought a little over 2 years ago is up about 56% since I bought it. I believe REIT's that are focused on commercial RE will remain good investments over the long haul. As I understand it, RE returns typically out perform the S&P500 over the long term. I wouldn't buy in now do to "peaking", but anyone whose been in them for a few years should consider them long term holds.

P.S. I'd never buy into REITs based primarily on residential, hotels, or similar. Way too cyclical.

12-21-2004, 01:57 PM	#1
Spanky Thinks s/he gets paid by the post Join Date: Dec 2004 Location: Minneapolis Posts: 2,784	Time to dump REIT?? As interest rates rise, the housing sector may suffer because of reduction in money supply while price of housing continues to increase faster than incomes. It seems prudent to dump REIT now. Any opinion? __________________ May we live in peace and harmony and be free from all human sufferings.

12-21-2004, 02:15 PM	#2
Cut-Throat Guest Posts: n/a	Re: Time to dump REIT?? Seems prudent to me, but it also seemed prudent to me last year for the same reasons. Since I got 'religion' I invested in Reits last February. My guts told me not to. YTD it is my best performing asset class - up over 20% - What do I know

12-22-2004, 04:57 AM	#3
BigMoneyJim Thinks s/he gets paid by the post Join Date: Feb 2003 Posts: 2,390	Re: Time to dump REIT?? That makes sense, but I've done just the opposite. I bought into REITs about a month ago to the tune of 12-13% of my portfolio. (Was aiming for 10% but goofed the online transfer, and there's a 1% redemption to withdraw funds before a year is up.) I figured it was probably a bad time, but so far I've been determined not to market time but to purchase based on my long term strategy. I finally got comfortable enough with VGSIX and decided to diversify some more for the long haul. I'm no REIT expert, but from everything I hear I don't see much reason for it to keep going up in the near future.

12-22-2004, 07:17 AM	#4
brewer12345 Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Mar 2003 Posts: 9,248	Re: Time to dump REIT?? Looks a lot to me like REITs are overvalued. I helped my MIL set up her portfolio earlier in the year when she retired (this is all gravy money, the pension is more than she can spend) and we chose a 10% REIT allocation. When I go over it with her during the holidays, I am going to recommend that she sell down (from ~12% now) to 5% and make a 5 to 7% allocation to commodities. __________________ “When you realize that you are one of the rare few who observe moral principles in their relationships with others, there is a temptation to sink into amorality, not out of conviction or pleasure but simply to avoid further pain, because there is no greater suffering than being an angel in hell, whereas a devil feels at home wherever he goes.” – Martin Page, How I Became Stupid

12-22-2004, 09:56 AM	#5
charlie Thinks s/he gets paid by the post Join Date: Mar 2004 Location: Dallas Posts: 1,069	Re: Time to dump REIT?? I was fortunate to get into REITS during the slump in the spring. I will rebalance in January to 14.3% of my stock allocation in my 60/40 "coffeehouse" IRA. Cheers, Charlie

12-23-2004, 01:00 PM	#6
AltaRed Full time employment: Posting here. Join Date: Feb 2004 Posts: 794	Re: Time to dump REIT?? The REIT I bought a little over 2 years ago is up about 56% since I bought it. I believe REIT's that are focused on commercial RE will remain good investments over the long haul. As I understand it, RE returns typically out perform the S&P500 over the long term. I wouldn't buy in now do to "peaking", but anyone whose been in them for a few years should consider them long term holds. P.S. I'd never buy into REITs based primarily on residential, hotels, or similar. Way too cyclical.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Part Time Work and Insurance	AlmostDone	FIRE and Money	3	01-19-2007 07:44 PM
long time reader, first post	savedapile	Hi, I am...	4	12-15-2006 07:45 PM
Part time to no time	Martha	Life after FIRE	54	12-08-2006 11:29 PM
Pension Time Bomb Article	Mountain_Mike	FIRE and Money	11	01-17-2006 07:49 AM
James Garfield on Leisure Time.....	Cut-Throat	Other topics	1	04-12-2005 06:22 PM