REITs

[slowsaver]

Well, I'm impressed so many of you are investing in specific sector REITs. I probably should have looked at what VGSLX invests in before now, but here it is:

14.4% - Residential
10.7% - Industrial
8.9% - Office
8.5% - Retail
8% - Healthcare
2.7% - Hotels & Resorts
40.4% - Specialized?

The first two might be ok, but the rest aren't looking good. Anyone have a guess what "specialized" might refer to?

 

[CyclingInvestor]

Well, I'm impressed so many of you are investing in specific sector REITs. I probably should have looked at what VGSLX invests in before now, but here it is:

14.4% - Residential
10.7% - Industrial
8.9% - Office
8.5% - Retail
8% - Healthcare
2.7% - Hotels & Resorts
40.4% - Specialized?

The first two might be ok, but the rest aren't looking good. Anyone have a guess what "specialized" might refer to?

Everything else - Communication towers, prisons, student housing, self storage, trailer parks, etc.

 

[imnontrad]

When you have a diversified portfolio, there may always be one asset class that is underperforming - and is the leader in other years. That being said, I would look at the type of properties the REITS hold and determine if you should switch to another REIT. I have one REIT that is data farm/cloud facilities. I think that's a lot better than one that holds generic office spaces right now.

 

[Clover5]

I do think there could be some upside in Residential REIT’s. If a much bigger percentage of workers are going to work remote then I’d expect them to move and upgrade their spaces. Also could be an advantage for Home Depot and Lowe’s. I wouldn’t touch retail or corporate REIT’S but residential is interesting.

 

[OldShooter]

When you have a diversified portfolio, there may always be one asset class that is underperforming - and is the leader in other years. That being said, I would look at the type of properties the REITS hold and determine if you should switch to another REIT. I have one REIT that is data farm/cloud facilities. I think that's a lot better than one that holds generic office spaces right now.

I do think there could be some upside in Residential REIT’s. If a much bigger percentage of workers are going to work remote then I’d expect them to move and upgrade their spaces. Also could be an advantage for Home Depot and Lowe’s. I wouldn’t touch retail or corporate REIT’S but residential is interesting.

I think you guys are making the classic mistake of confusing a good business with a good investment.

The relative business strength of the REITs you mention may well be as you say, but until you look at prices you cannot possibly know which REITs are good investments. The REITs that you favor may well be overpriced and the REITs that are out of favor may well be underpriced.

 

[RobLJ]

It's hard to say, but IF the virus comes back with a vengeance in Fall/Winter before a vaccine or effective treatment, he will probably be right.
The market now seems disconnected from the "real" economy (no doubt because these are big companies and the Fed backstop/spending) and factoring in a V recovery. I find a true V recovery hard to believe; I suspect it will take at least 2-3 years to recover production and employment, given the damage to small companies and tourism but I'm discounting the Fed.
If REITS are still down in a year/18 months, I would find them attractive, though, if only for the yield.

I find it hard to believe our portfolio is up 3% over a year ago--but I'll take it. If I get over 45% stock allocation, I'm selling the excess to cash, particularly since it's 4 years to full SS age.

Thanks for sharing your opinions. Guess I'll wait longer and see what happens.

A friend of mine says he thinks there will be another drop (all stocks, not just REITs) after the election -- regardless of who wins. Now seems like a good time to hit pause on investing -- of course, that's how you miss the bottom.