The REIT Time to Buy?

[charlie]

I was lucky enough to get out of the REIT Index before it cratered but
have been keeping a watchful eye.

Anybody notice that the index was up almost 17% yesterday?

Does anbody care?

Cheers,

charlie

 

[TeeRuh]

I care since I'm currently down 60% since buying VG REIT index last summer. Need quite a few + 17% days before I get close to even.

t.r.

 

[freebird5825]

Ditto...with losses on paper, I now have less than 1% of my total portfolio in VGSIX. It's one of my bucking bronco specialty low stakes, nestled in a Roth account.
I've owned it since March 2004. It is currently showing 12.32% TTM dividend yield, so I'll let it alone. I remember how bad tech stocks were regarded in the last bubble burst, so maybe the housing bubble will act in a similar fashion.
Holding the line...

 

[FinallyRetired]

Anybody notice that the index was up almost 17% yesterday?

And down 10% today. This index is acting like a penny stock in volatility. Too much for me.

 

[Grep]

The volatility in REIT's has been breathtaking.

Unfortunately, the yield this quarter (VGSIX) has dropped to about 7.5%, from 11% or so last quarter. REITs have just recently been given permission to provide stock instead of cash dividends. Not all will do so, of course, and when they do, most likely the fund managers would just sell it on the spot and provide cash to you anyway. Most view this change as a negative, though some have argued this is mostly a wash, and it does allow REITs to preserve capital, hence staving off bankruptcy for some (the leverage in REITs is a worry at the moment).

Is it a good buy now, having dropped by more than 70%? No one knows, but the bad news is probably baked into the price already. Commercial real estate tends to trail most other sectors in a recovery, so it may be a number of years before it recovers very significantly.

I've been accumulating some now and then. Be careful not to get burned by the daily volatility - if you buy in a mutual fund, place your orders right before the end of a trading day.

 

[jug]

I was lucky enough to get out of the REIT Index before it cratered but
have been keeping a watchful eye.

Anybody notice that the index was up almost 17% yesterday?

Does anbody care?

Cheers,

charlie

for the long term, REIT is a no brainer, what goes all the way down, comes up and as we just saw, what went all the way up came down. You are approaching the "oversold" side, for long term, grab some

jug

 

[CyclingInvestor]

I have followed a number of REITs since around 96-97, and have often been very heavily invested in them. I agree that REITs probably represent a good long term value at these levels - at least those that do not fall prey to debt issues. The REIT board at the Motley Fool has some very knowledgable posters (Reitnut and LanRes come to mind) who regularly comment and analyze both individual stocks and the REIT market as a whole.

 

[haha]

I have followed a number of REITs since around 96-97, and have often been very heavily invested in them. I agree that REITs probably represent a good long term value at these levels - at least those that do not fall prey to debt issues. The REIT board at the Motley Fool has some very knowledgable posters (Reitnut and LanRes come to mind) who regularly comment and analyze both individual stocks and the REIT market as a whole.

I second this plug for the Motley Fool REIT Board. However, Reitnut while knowledgable is congenitally optimistic. Lan Res works in the field and IMO is very sharp. Many of the others are dividend chasers and thus more likely to get you into trouble than to help. The board has a very nice vibe usually.

I had 1/4 to 1/3 of my port in REITs until about 2004. I missed the later run-up, but also missed all of the subsequent crash.

I have no opinion on REITs right now.

Ha

 

[dougie790]

What about a reit fund?

In my 401k we have the AIM Real Estate fund Class A. Do you think this is worth investing in at this time? I currently have all my money in Growth Fund of America. Thanks.

Dave

 

[ziggy29]

Right now, anyone invested in REITs needs some Dramamine because of the violent rollercoaster ride they've been on. Ye gods, have these things been volatile...

 

[audreyh1]

Wow - last two days REITs have been on fire!

A couple of days ago when I rebalanced, my REIT allocation was so close to target (just under) that I didn't buy any.

Now, two days later, the REIT allocation is already 8% out of balance on the upside.

It's amazing how fast some of these asset classes move!

Audrey

 

[tulak]

REITs are now my 2nd worse performing asset class. Another 16% gain and they're even, so at this rate, maybe end of next week?

What I don't know is how I feel about TSM taking the worse performer spot in my allocation...

 

[FUEGO]

Wow, I hadn't noticed that the REITs were up this much. I'm up 49% since I started the REIT position on Nov 19 2008. I bought a little bit prematurely but catching falling knives can be hard. Looks like I'm slightly over my 5% target allocation to REITs right now.

 

[Gotadimple]

I've been accumulating some now and then. Be careful not to get burned by the daily volatility - if you buy in a mutual fund, place your orders right before the end of a trading day.

I agree that daily volatility can be a problem. However, when you buy a mutual fund it doesn't matter what time of day you purchase as sales are recorded at the NAV calculated at the end of the day.

If I'm confused, here, please correct me.

-- Rita

 

[audreyh1]

I agree that daily volatility can be a problem. However, when you buy a mutual fund it doesn't matter what time of day you purchase as sales are recorded at the NAV calculated at the end of the day.

If I'm confused, here, please correct me.

-- Rita

Right - if you buy a REIT mutual fund you get the end of day price. If you buy a REIT stock or a REIT ETF, then you buy it during market hours.

But I suspect the OP was just warning to place the order late in the trading day is so that you won't be surprised by changes at the close compared to whatever REITs were doing early in the day.

Audrey

 

[audreyh1]

WOW! Those REITs are on fire! That was the only thing I didn't rebalance at the beginning of this week because it was at par. But now my REIT funds have already blown way past their allocation - time to trim.

Audrey

 

[Maurice]

Yeah, I'm now over allocated in REITs and China.

Rather fortuitously I bought a bunch of VGSNX on July 10th, its up 40% since then.

 

[audreyh1]

Which July 10th? 1 month ago?

WOW - yes it looks like VGSNX tracks pretty closely with FRESX, and my FRESX fund is up 46% since July 10th!

My REIT funds together are up 36% since I rebalanced on Jan 15, 2009.

Audrey

 

[Maurice]

Yeah, 1 month ago. VGSNX closed at 8.81 yesterday and 6.26 on July 10th. That was its low point since April.

The timing was just lucky, I'd been meaning to top off my REIT allocation and finally did it then as part of a broader rejiggering I did to free up funds to buy TIPS in the July auction.

 

[WhoDaresWins]

I have owned VGSIX for about 5 years now. My statement at the end of June showed me in negative territory from my initial purchase. I also own shares in an international property management/ real estate concern. I hope they go back up to what I bought them for 4 years ago as I have taken a real beating.

 

[Maurice]

VGSIX is up 29% since June 30. Maybe you're back in the black now, WhoDaresWins?

 

[freebird5825]

I've had VGSIX since 2004. M* shows a 5 year total return of 2.17%, and a 10 year total return of 6.69%. No data for 15 year.
Still holding it in a Roth account for the next 8.5 years with no plans to mess with it.
Nice to see some improvement lately

 

[fjammer22]

Are VGSIX and VNQ basically the same thing? Just the VNQ is an ETF?

 

[WhoDaresWins]

I am now in the black with VGSIX. I am holding it for the long-term and I feel it will see improvement over the coming years. It has actually held up better than many other funds that I hold.

 

[FUEGO]

Are VGSIX and VNQ basically the same thing? Just the VNQ is an ETF?

Yes they are different share classes of the same fund with the same underlying holdings. And they have slightly different expense ratios.