My master plan says it is soon time to take my initial stake in REITs (moving from ~0% up to ~5% of equity portfolio over a couple years, then gradually building to 10% over a longer time).
Call me a market timer maybe, but I'm having a hard time motivating myself to buy a stock class with a P/E over 62. I know REITs are a bit unique in the world of US stocks, and with earnings growth of 3.5% and yields around the same (looking at VGSIX) it seems like in the long haul one might expect around 4% real +/- whatever happens to that P/E multiple (it seems high so in time I'd guess it would be more likely to go down than up, and erode that 4%). wbern had a post on the topic not long ago.
Looking at Vanguard's global REIT VGXRX the P/E is under 13, earnings growth over 10%, yields around 3% and has half the P/Bk of VGSIX.
Based on that I have to think international REITs are fundamentally different businesses than US REITs? Or, is the ex-US REIT class just a potential good buy right now (if one has ability to shoulder the risk)?
Maybe real estate is a non-essential tilt? (already have some cap weight exposure in my total market funds presumably)
Don't do something. Just stand there!