VGSIX any thoughts on adding it

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grandpadan
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VGSIX any thoughts on adding it

Post by grandpadan » Wed Aug 08, 2018 7:39 pm

Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.

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corn18
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Re: VGSIX any thoughts on adding it

Post by corn18 » Wed Aug 08, 2018 7:44 pm

grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
Yowzers! It dropped 75% in the great recession. Not sure what purpose it could serve in a 3 fund portfolio. Of course past performance is not an indicator of future returns, so maybe it'll be great.

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ruralavalon
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Re: VGSIX any thoughts on adding it

Post by ruralavalon » Wed Aug 08, 2018 7:50 pm

grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
Vanguard Real Estate Index Fund Investor Shares (VGSIX) has a relatively low correlation to the total stock market, about 46 where 100 represents perfect correlation, so there can be a diversification benefit. Also the fund may provide some inflation protection.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

tibbitts
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Re: VGSIX any thoughts on adding it

Post by tibbitts » Wed Aug 08, 2018 7:53 pm

grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
Real Estate is probably considered one of the most logical next places to go beyond three funds.

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Taylor Larimore
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Re: VGSIX any thoughts on adding it

Post by Taylor Larimore » Wed Aug 08, 2018 7:54 pm

grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
grandpadan:

Vanguard Total Stock Market Index Fund (VTSAX) already holds the market weight in VGSIX (Vanguard REIT Fund).

Strive for simplicity -- not complexity. Read my "Simplicity" link below.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

grandpadan
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Re: VGSIX any thoughts on adding it

Post by grandpadan » Wed Aug 08, 2018 9:59 pm

Thanks everyone!

ThePrince
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Re: VGSIX any thoughts on adding it

Post by ThePrince » Wed Aug 08, 2018 10:09 pm

ruralavalon wrote:
Wed Aug 08, 2018 7:50 pm
grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
Vanguard Real Estate Index Fund Investor Shares (VGSIX) has a relatively low correlation to the total stock market, about 46 where 100 represents perfect correlation, so there can be a diversification benefit. Also the fund may provide some inflation protection.
The above chart showing it dropped like a rock during the Great Recession indicates to me a high correlation with the stock market.

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kenyan
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Re: VGSIX any thoughts on adding it

Post by kenyan » Wed Aug 08, 2018 10:13 pm

ThePrince wrote:
Wed Aug 08, 2018 10:09 pm
ruralavalon wrote:
Wed Aug 08, 2018 7:50 pm
grandpadan wrote:
Wed Aug 08, 2018 7:39 pm
Started the 3 fund portfolio...would like to add VGSIX (real estate index). What’s your thoughts on adding VGSIX as the 4th fund? The yield is more than VTSAX.
Vanguard Real Estate Index Fund Investor Shares (VGSIX) has a relatively low correlation to the total stock market, about 46 where 100 represents perfect correlation, so there can be a diversification benefit. Also the fund may provide some inflation protection.
The above chart showing it dropped like a rock during the Great Recession indicates to me a high correlation with the stock market.
You might want to look a little more closely, then. Sure, it dropped along with the major indices during the 2008-2009 timeframe, but what did it do during the crash of 1999-2002?

A correlation of +0.46 that it will sometimes follow the market, sometimes not.
Retirement investing is a marathon.

RL1013
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Re: VGSIX any thoughts on adding it

Post by RL1013 » Wed Aug 08, 2018 11:44 pm

I recently added it to my ROTH to get some diversification. I was 100% VTSAX. Planning the same for my spouses ROTH.

grandpadan
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Re: VGSIX any thoughts on adding it

Post by grandpadan » Thu Aug 09, 2018 9:54 am

Actually was also looking at a better yield index fund... any vanguard high yield index fund recommendation?

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ruralavalon
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Re: VGSIX any thoughts on adding it

Post by ruralavalon » Thu Aug 09, 2018 11:45 am

grandpadan wrote:
Thu Aug 09, 2018 9:54 am
Actually was also looking at a better yield index fund... any vanguard high yield index fund recommendation?
Higher return means higher risk.

What about Vanguard Small-cap Value Index Fund Admiral Shares (VSIAX) ER 0.07%?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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abuss368
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Re: VGSIX any thoughts on adding it

Post by abuss368 » Thu Aug 09, 2018 7:47 pm

ruralavalon wrote:
Thu Aug 09, 2018 11:45 am
grandpadan wrote:
Thu Aug 09, 2018 9:54 am
Actually was also looking at a better yield index fund... any vanguard high yield index fund recommendation?
Higher return means higher risk.

What about Vanguard Small-cap Value Index Fund Admiral Shares (VSIAX) ER 0.07%?
I believe most small cap funds include a large allocation to REITs.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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