REITs
Posted: Mon Aug 19, 2019 9:40 am
Anyone buying them?
Permanent Portfolio Forum
https://www.gyroscopicinvesting.com/forum/
https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=10083
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.Tyler wrote: ↑Mon Aug 19, 2019 9:12 pm Funny you should mention that out of the blue. I've been considering adding an REIT fund for a while now and am pretty close to pulling the trigger. It's not a timing thing for me, but I sorta like them in moderation for the income in good times and inflation protection when needed.
"Final" is a strong word. I always have an open mind to new information. But I'm leaning towards this:
Final is not so strong for me as I am 82 and still thinking about the perfect portfolio. How does the backtest work out?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.
In this case modeling it for yourself is a lot simpler than waiting on me to post a bunch of charts.
Average returns +1.9%. Thanks!Tyler wrote: ↑Tue Aug 20, 2019 4:20 pmIn this case modeling it for yourself is a lot simpler than waiting on me to post a bunch of charts.
https://portfoliocharts.com/portfolio/my-portfolio/
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.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.
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 wrote: ↑Tue Aug 20, 2019 5:37 pmI 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.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.
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.modeljc wrote: ↑Tue Aug 20, 2019 6:15 pmFor +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 wrote: ↑Tue Aug 20, 2019 5:37 pmI 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.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.
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.InsuranceGuy wrote: ↑Tue Aug 20, 2019 9:24 pmIf 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
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.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...
Real estate was where the crisis happened in 08. Stocks crashed because of what happened to the banks, what happened to the banks happened because of bad loans, bad loans were mostly against real estate. So basically, if real estate has a bubble burst it will effect stocks. However, if stocks have a bubble burst, it won't necessarily effect real estate. A REIT is still a stock at the end of the day, so they will likely catch some headwinds, but it will still function as a diversifier, just as it should, imo.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...