Gyroscopic Investing

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.

My subjective story as to why they are likely to outperform is that they are historically cheaper than stocks as a whole right now. Stocks in general are extremely overvalued. But, for a good number of years, up until the last year really, REIT's have underperformed stocks by a large margin. So there's the rotation to REIT's that is still relatively fresh and like most big macro shifts has potential to continue for years. If interest rates continue to go down, REIT's will also start really catching a bit as a bond income proxy by desperate retirees and pension funds. Also, if the current political and populist risks wind up following through over the next decade, then real assets in general will be where it's at. I'm a fan of REIT's right now. I'm very iffy and unsure about stocks right now.

dualstow wrote: ↑Wed Aug 21, 2019 9:57 am Bought some REITs for my vp today. I’ll drip more in each week.
Paralysis over

It's always good to kick the paralysis one way or another. FWIW, I joined you and bought some SCHH this week. I've been tracking it for so long that I started taking it for granted that it was already part of my portfolio, so I figured it was time to make it official.

I'm glad you posted- forgot to buy this week!

My father has a significant amount of his net worth in a single REIT: RioCan Real Estate Investment Trust.

That one stock. I shudder slightly every time I get a glimpse of his accounts.

At least it's not puny. It's the biggest REIT in Canada. Still... this is the man who was teaching me about money as I was growing up. Could have been worse lessons I suppose.

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InsuranceGuy wrote: ↑Mon Oct 21, 2019 3:02 pm REITs have again blown past their all time highs. VNQ closed at $95.28 with it's previous intraday high of $94.07 busted both Friday and again today. Good time to be in REITs!

Very nice!