REITs

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pmward
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Re: REITs

Post by pmward » Tue Aug 20, 2019 5:37 pm

Tyler wrote:
Tue Aug 20, 2019 3:39 pm
modeljc wrote:
Tue Aug 20, 2019 3:26 pm
Thanks for all the good work over at Portfolio charts. I would be interested to know what you think might end up being a final allocation for you.
"Final" is a strong word. I always have an open mind to new information. But I'm leaning towards this:

20% Total Stock Market
20% Small Cap Value
20% Long Term Treasuries
20% Gold
10% REITs
10% Short Term Treasuries

It still basically runs like a PP with a side of SCV. I'm just looking at replacing some of the cash with REITs. They provide some of the same inflation protection with a bit more income and my cash levels are already pretty healthy relative to my expenses. The overall portfolio also has performed especially well in certain metrics that matter to me like perpetual WRs.

One of these days I'm going to write a post about my portfolio and how I got there. Not that my story is anything special, but it's always good to hear different investing perspectives.
I think I'm a fan of this. I have some serious concerns about cash going forward, as I think we are going back negative nominal (and possibly might even go negative real) and this just might address those fears. Looks very good in test as well.
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Re: REITs

Post by modeljc » Tue Aug 20, 2019 6:15 pm

pmward wrote:
Tue Aug 20, 2019 5:37 pm
Tyler wrote:
Tue Aug 20, 2019 3:39 pm
modeljc wrote:
Tue Aug 20, 2019 3:26 pm
Thanks for all the good work over at Portfolio charts. I would be interested to know what you think might end up being a final allocation for you.
"Final" is a strong word. I always have an open mind to new information. But I'm leaning towards this:

20% Total Stock Market
20% Small Cap Value
20% Long Term Treasuries
20% Gold
10% REITs
10% Short Term Treasuries

It still basically runs like a PP with a side of SCV. I'm just looking at replacing some of the cash with REITs. They provide some of the same inflation protection with a bit more income and my cash levels are already pretty healthy relative to my expenses. The overall portfolio also has performed especially well in certain metrics that matter to me like perpetual WRs.

One of these days I'm going to write a post about my portfolio and how I got there. Not that my story is anything special, but it's always good to hear different investing perspectives.
I think I'm a fan of this. I have some serious concerns about cash going forward, as I think we are going back negative nominal (and possibly might even go negative real) and this just might address those fears. Looks very good in test as well.
For +2% it a real deal. Let me know how to implement this one! NOW? OR? later. Three year returns are small on VNQ and VRB vs SPY. Or wait for 30% correction in SPY.
pmward
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Re: REITs

Post by pmward » Tue Aug 20, 2019 7:37 pm

modeljc wrote:
Tue Aug 20, 2019 6:15 pm
pmward wrote:
Tue Aug 20, 2019 5:37 pm
Tyler wrote:
Tue Aug 20, 2019 3:39 pm


"Final" is a strong word. I always have an open mind to new information. But I'm leaning towards this:

20% Total Stock Market
20% Small Cap Value
20% Long Term Treasuries
20% Gold
10% REITs
10% Short Term Treasuries

It still basically runs like a PP with a side of SCV. I'm just looking at replacing some of the cash with REITs. They provide some of the same inflation protection with a bit more income and my cash levels are already pretty healthy relative to my expenses. The overall portfolio also has performed especially well in certain metrics that matter to me like perpetual WRs.

One of these days I'm going to write a post about my portfolio and how I got there. Not that my story is anything special, but it's always good to hear different investing perspectives.
I think I'm a fan of this. I have some serious concerns about cash going forward, as I think we are going back negative nominal (and possibly might even go negative real) and this just might address those fears. Looks very good in test as well.
For +2% it a real deal. Let me know how to implement this one! NOW? OR? later. Three year returns are small on VNQ and VRB vs SPY. Or wait for 30% correction in SPY.
The long term S&P 500 is way ahead, but in the last year VNQ is +9.2% vs SPY +1.5%. If you're going to do it and hold forever, just do it now. Otherwise, DCA might be a good idea. Not sure I would wait for a correction, as I think it's likely (though of course not guaranteed) that SPY will drop more than VNQ in the next bear market. I also think VNQ is likely to draw more interest if rates continue to drop as a fixed income replacement.
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InsuranceGuy
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Re: REITs

Post by InsuranceGuy » Tue Aug 20, 2019 9:24 pm

Tyler wrote:
Tue Aug 20, 2019 3:39 pm
But I'm leaning towards this:

20% Total Stock Market
20% Small Cap Value
20% Long Term Treasuries
20% Gold
10% REITs
10% Short Term Treasuries
If I were to B&H, I would probably do something similar. I might be more likely to make a small modification only because I tend to favor equities:

20% Total Stock Market
20% Small Cap Value
10% Long Term Treasuries
20% Gold
20% REITs
10% Short Term Treasuries

or maybe even ditch the barbell and go:

20% Total Stock Market
20% Small Cap Value
20% Intermediate Term Treasuries
20% Gold
20% REITs
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Re: REITs

Post by dualstow » Wed Aug 21, 2019 9:57 am

Bought some REITs for my vp today. I’ll drip more in each week.
Paralysis over O0
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Re: REITs

Post by pmward » Wed Aug 21, 2019 10:43 am

InsuranceGuy wrote:
Tue Aug 20, 2019 9:24 pm
Tyler wrote:
Tue Aug 20, 2019 3:39 pm
But I'm leaning towards this:

20% Total Stock Market
20% Small Cap Value
20% Long Term Treasuries
20% Gold
10% REITs
10% Short Term Treasuries
If I were to B&H, I would probably do something similar. I might be more likely to make a small modification only because I tend to favor equities:

20% Total Stock Market
20% Small Cap Value
10% Long Term Treasuries
20% Gold
20% REITs
10% Short Term Treasuries

or maybe even ditch the barbell and go:

20% Total Stock Market
20% Small Cap Value
20% Intermediate Term Treasuries
20% Gold
20% REITs
Going that low on long term treasuries scares me. I wouldn't do it. Too heavily tilted to "inflation" and not anywhere near enough "deflation" protection for me.
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Re: REITs

Post by gizmo_rat » Fri Aug 23, 2019 9:20 am

I've been thinking about a TSM/IT/BIL/GLD/REIT portfolio ever since I saw it drop out of the Portfolio Charts portfolio finder a while ago.
https://portfoliocharts.com/portfolio/portfolio-finder/

It does perform really well againt the measures that matter to me (ulcer index, perpetual withdrawal rate) and would easy to transition to.

However I've never really seen any discussion / advocacy of this mix. Apart from the "home ownership means overexposure to realestate" and "driving with the rearview mirror" arguments *, am I missing any obvious red flags ?


*Edit - Actually just remembered I think I got gated in to a REIT in 2008.
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InsuranceGuy
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Re: REITs

Post by InsuranceGuy » Sun Aug 25, 2019 8:08 pm

pmward wrote:
Wed Aug 21, 2019 10:43 am
Going that low on long term treasuries scares me. I wouldn't do it. Too heavily tilted to "inflation" and not anywhere near enough "deflation" protection for me.
Different strokes for different folks I guess.
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InsuranceGuy
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Re: REITs

Post by InsuranceGuy » Tue Sep 03, 2019 10:04 am

REITs are now at an all time high. VNQ is trading around $93 with it's previous intraday high of $92.92 busted, will be interested to see how it holds over the rest of the day and week.
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Re: REITs

Post by pmward » Tue Sep 03, 2019 10:57 am

So far, my trading 10% of my small caps for REIT's last week is looking like a good move. REIT's are breaking out of a double bottom with handle base today going back to June. We will see if the breakout holds. I would love to see a weekly close above the breakout level.
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Re: REITs

Post by boglerdude » Thu Sep 05, 2019 11:23 pm

So in the past REITs have been an uncorrelated diversifier in backtests? With financialization increasing, should we expect that to continue? They crashed with stocks in 08. Whats the macroeconomic/real world explanation for why they might outperform total stock market. Leverage? Companies leverage too...
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Re: REITs

Post by Tyler » Fri Sep 06, 2019 10:43 am

boglerdude wrote:
Thu Sep 05, 2019 11:23 pm
So in the past REITs have been an uncorrelated diversifier in backtests? With financialization increasing, should we expect that to continue? They crashed with stocks in 08. Whats the macroeconomic/real world explanation for why they might outperform total stock market. Leverage? Companies leverage too...
Personally, I would not invest in REITs with the expectation that they are a perfect foil to stocks in down years nor with the idea that they should outperform stocks overall. Instead, I see diversified & liquid real estate as a rare real asset largely disassociated from corporate profits that generates good income and is uniquely capable of quickly adjusting to inflation (through rising rents). It's not a solo portfolio savior, but it's a nice ingredient in many well-diversified portfolios that in the right proportions has a decent knack of increasing returns without the associated increased volatility.
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