Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
REITS Anyone?
Old 09-11-2014, 12:25 AM   #1
Full time employment: Posting here.
UnrealizedPotential's Avatar
 
Join Date: May 2014
Posts: 573
REITS Anyone?

I own a REIT fund and I have since 2007.It is 13% of my Portfolio assets.So,for those owning REITS how did you decide what percentage to allocate to REITS ?I like REITS because it pays dividends and I can participate in Real Estate without having to fix any plumbing problems and do not have to deal with a mortgage.
__________________

__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
UnrealizedPotential is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-11-2014, 06:17 AM   #2
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,709
We have 4.9% allocated to Vanguard US REIT, and that is in my Roth IRA. When the subject of REIT comes up, usually one hears 5-10% allocation recommended, although some disregard it entirely, and others have more (such as you).

When in-laws sold their home (about 15% of their assets at the time) we added the proceeds to their brokerage account. I developed a plan for investing so that we could diversify more than their managed accounts do, and have executed that partially. Currently have 4.1% in REITs, such as HCP INC (HCP), Healthcare TR Amer Inc (HTA), Vanguard Global EX-US Real VNQI, Realty Income Corp (O), iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. (IFGL).

I'd like to do more with REITs, but will wait for lower prices. This is a taxable brokerage account for in-laws, so that keeps me from going much further. Tax bracket is important. I will stay with 5% allocation as the absolute limit for them.
__________________

__________________
target2019 is offline   Reply With Quote
Old 09-11-2014, 06:38 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
We have three REIT ETFs in our Portfolio (RWX, VNQ, & ICF) representing 12.1 % (as of yesterday's close). The performance (since purchase) of these three are:

(Gains vs Cost)
RWX = +7.3%
VNQ = +32.0%
ICF = +10.6%

We have held VNQ for about six years now and the others less than two. This includes Dividends.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 09-11-2014, 07:29 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
I have about 10% in VNQ. This is my long term AA. I just trimmed it down from 13% after a nice YTD return so far.
__________________
utrecht is offline   Reply With Quote
Old 09-11-2014, 07:48 AM   #5
Full time employment: Posting here.
 
Join Date: Nov 2008
Posts: 728
I too have about 5% of my Vanguard account in their REIT. As my Dad used to say, "they can't make any more land so over the long term the price has to go up" To me it's the best diversification from Stocks and Bonds. Also, many of the financial sources recommend Vanguard since their costs are so low.
__________________
jerome len is offline   Reply With Quote
Old 09-11-2014, 10:16 AM   #6
Full time employment: Posting here.
Mr._Graybeard's Avatar
 
Join Date: Apr 2011
Posts: 669
I just got a pitch from Schwab about a new global real estate index fund they're opening. It will track the Russell Fundamental Global Select Real Estate Index -- major foreign holdings look pretty similar to Vanguard's VGRLX. Any thoughts on that one? Expenses are 0.49%, which seems pretty reasonable for a global REIT fund.
__________________
Mr._Graybeard is online now   Reply With Quote
Old 09-11-2014, 10:23 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by Mr._Graybeard View Post
I just got a pitch from Schwab about a new global real estate index fund they're opening. It will track the Russell Fundamental Global Select Real Estate Index -- major foreign holdings look pretty similar to Vanguard's VGRLX. Any thoughts on that one? Expenses are 0.49%, which seems pretty reasonable for a global REIT fund.
By what method do they attempt to track this index?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 09-11-2014, 10:54 AM   #8
Recycles dryer sheets
 
Join Date: Sep 2012
Posts: 406
8% currently in 401K(DFGEX) and goal is to have 10% of total portfolio.
__________________
Retired at age 52 on 12/1/2016
AA:60/40 WR:3% until 2022 then 4% is the plan
retire2020 is offline   Reply With Quote
Old 09-11-2014, 11:03 AM   #9
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,067
I have my own REIT, with about 50% of my net worth in it. I get ~10% of the equity I have returned as income (after all expenses and allocations).

It's not a 'real' publicly traded REIT, but it is real for me.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 09-11-2014, 11:24 AM   #10
Thinks s/he gets paid by the post
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 1,364
We have about 4% of our investments in a REIT fund and a REIT stock. The Megacorp provided financial advisor suggested we increase that to 6%, to gain more dividend income.
__________________
Current target FIRE date: Under negotiation, can happen anytime.
jollystomper is offline   Reply With Quote
Old 09-11-2014, 11:38 AM   #11
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,709
Quote:
Originally Posted by Mr._Graybeard View Post
I just got a pitch from Schwab about a new global real estate index fund they're opening. It will track the Russell Fundamental Global Select Real Estate Index -- major foreign holdings look pretty similar to Vanguard's VGRLX. Any thoughts on that one? Expenses are 0.49%, which seems pretty reasonable for a global REIT fund.
I think many funds are getting and staying competitive. I went with VNQ-I and IFGL. The latter has a 7-year track record.

Maybe Schwab can hit a grand slam for you.
__________________
target2019 is offline   Reply With Quote
Old 09-11-2014, 12:11 PM   #12
Recycles dryer sheets
 
Join Date: Mar 2011
Location: Dallas
Posts: 457
Got some NLY and AGNC...maybe 9-10% of stock portfolio. Mom has some NLY, half bought in Jan of this year...
__________________
Surewhitey is offline   Reply With Quote
Old 09-11-2014, 12:32 PM   #13
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,849
In this thread there is an example asset allocation for a grouping called "hard assets" which includes not only REIT, but also natural resources stocks. There's a calculator that has one financial analyst's idea of what a good allocation would be: Gone Fishing Portfolio. So for instance, that says that 18% allocation to hard assets for a 40 year old, with a 60-40 split natural resources to REIT.
__________________
sengsational is offline   Reply With Quote
Old 09-11-2014, 12:36 PM   #14
Recycles dryer sheets
 
Join Date: Feb 2014
Location: San Diego
Posts: 70
We have rental real estate which we are selling. I will invest a portion of our proceeds in one or more of Vanguard REIT funds.
__________________
DH retired 2014.
Sold my business in '16 and retired 5-17!
Ginny is offline   Reply With Quote
Old 09-11-2014, 12:45 PM   #15
Recycles dryer sheets
 
Join Date: Jan 2014
Location: Austin
Posts: 496
I think REIT's should be the poster child for chasing performance.

I got out of REIT's (large position in AGNC with a minor position in VNQ) last year when I realized I had bought high and then saw just how sensitive they can be to rising rates.

Their resurgence in the past year is due primarily to rates dropping a bit rather than rising; personally I'm going to wait and see what happens when rates finally do start to rise before I commit up to 5% of my portfolio to them, as I think I would be repeating my mistake if I were to get back into them right now.

Agency REIT's, obviously, are the most vulnerable.
__________________
ER'd 6/1/2014 @ age 53. AA=70/30, WR=3%
Looking4Ward is offline   Reply With Quote
Old 09-11-2014, 01:23 PM   #16
Thinks s/he gets paid by the post
RockyMtn's Avatar
 
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,234
REIT's (VNQ) are 2.5% of our portfolio. A bit light but have 3 houses that cover the rest of my real estate allocation. Working to get that to one house and will lift REIT allocation at that point.
__________________
FIRE'D in July 2009 at 51...Never look back!
RockyMtn is online now   Reply With Quote
Old 09-11-2014, 02:29 PM   #17
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,709
Quote:
Originally Posted by sengsational View Post
In this thread there is an example asset allocation for a grouping called "hard assets" which includes not only REIT, but also natural resources stocks. There's a calculator that has one financial analyst's idea of what a good allocation would be: Gone Fishing Portfolio. So for instance, that says that 18% allocation to hard assets for a 40 year old, with a 60-40 split natural resources to REIT.
Can you supply examples of each type of hard asset stock? That was mentioned in the other thread, but I didn't see the source of the graphic you posted. I'm interested...
__________________
target2019 is offline   Reply With Quote
Old 09-11-2014, 02:41 PM   #18
Recycles dryer sheets
Cassie's Avatar
 
Join Date: Jul 2012
Posts: 281
This may be a dumb question, however, do you buy REITS/ETF's like VNQ and hold them? Or do you buy low, sell high and re-buy. Thanks
__________________
Cassie is offline   Reply With Quote
Old 09-11-2014, 02:58 PM   #19
Full time employment: Posting here.
UnrealizedPotential's Avatar
 
Join Date: May 2014
Posts: 573
Quote:
Originally Posted by Cassie View Post
This may be a dumb question, however, do you buy REITS/ETF's like VNQ and hold them? Or do you buy low, sell high and re-buy. Thanks
I think it's a fair question.I can only tell you what I do.If you reinvest all the dividends including any capital gains then I think it makes sense to hold onto it through good times and bad.Some might sell and then wait to reenter the market.But,when do you get back in?So for me I just hold on and stay the course.
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
UnrealizedPotential is offline   Reply With Quote
Old 09-11-2014, 03:08 PM   #20
Full time employment: Posting here.
Mr._Graybeard's Avatar
 
Join Date: Apr 2011
Posts: 669
Quote:
Originally Posted by haha View Post
By what method do they attempt to track this index?

Ha
Good question, since it's one I don't have an answer for. I'd assume they'd buy the same holdings the index weights in the same proportions, but I don't know that for sure. I'll do some homework.
__________________

__________________
Mr._Graybeard is online now   Reply With Quote
Reply


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

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Anyone invest in REITs? boilerman FIRE and Money 16 06-04-2013 02:53 PM
Non-traded REITs vs. publicly traded REITs Gardnr FIRE and Money 34 07-04-2011 07:42 AM
Time to buy REITS? charlie FIRE and Money 63 04-20-2004 05:05 PM
Including REITS in Portfolio DFW_M5 FIRE and Money 27 01-12-2004 05:51 AM

 

 
All times are GMT -6. The time now is 02:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.