REITS: Hold or Fold?

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REITS: Hold or Fold?

Post by HappyJack » Sun May 17, 2020 8:49 pm

I have 3% of my porfilio in SCHH REIT fund. It is in my tax-deferred account (and it is getting crushed). Part of my concern is I don’t think this is coming back anytime in the near future. I am considering the following options.

1. Hold on- which I can do.
2. Sell all and move it into an already substantial VTI position.
3. Dollar cost average out over the next eight months and move into VTI that way.

I am planning on Simplifying my portfolio in the near future. My first instinct is to stay the course and hold on until a more appropriate time - not locking in the losses.

But regardless, I am looking for an exit point, and would be even if this fund was up, moving into VTI and accepting market weight on REITS.

Thanks for any thoughts.

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David Jay
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Re: REITS: Hold or Fold?

Post by David Jay » Sun May 17, 2020 8:59 pm

There is one question that will reveal if you’re anchoring (not wanting to sell when an asset is down):

If you didn’t hold that REIT fund today, would you go out and buy it?
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: REITS: Hold or Fold?

Post by nisiprius » Sun May 17, 2020 9:05 pm

When you bought them, what did you write down about your reasons, at the time, for buying them; your expectations for what they would do; and what would be the conditions under which you would sell them?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: REITS: Hold or Fold?

Post by arcticpineapplecorp. » Sun May 17, 2020 9:10 pm

why did you buy the REIT in the first place?

3% isn't a huge part of your portfolio. So while REITS since YTD (-25.31%) have fallen farther then many other assets, with small cap value being the exception (-32.02% ytd), it's only accounting for -0.75% to your total portfolio's loss (3% X 25.31%). Is that really worth freaking out over?

This is why many often say if you're going to slice and dice, to do it with less than 10% isn't really going to move the needle much (in either direction).

So do what you want, it won't really matter. But you believe it will be a drag on the perfomance overall. No one knows that.

Also, it's not "getting crushed". It "got crushed". See the difference? You are assuming it will continue to go down (relative to other assets). There's no way to know that. Admit you're guessing. All that we can say and/know for sure is the past.

really depends on your timeframe. It's done worse in the recent past, yes, but from date of inception (5/31/96) it's beaten the total stock market index fund: ... A%5B%5D%7D

I agree with David Jay. If you didn't own it would you go out and buy it right now at it's current price with the amount of money invested in it currently? If yes, then you should be buying more. If no, you should sell it.
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Re: REITS: Hold or Fold?

Post by JonnyDVM » Sun May 17, 2020 9:26 pm

Feeling like a broken record, but dumping REIT now is the classic sell low move. I myself am buying more but regardless, I would suggest just holding it since buy more wasn’t an option. You don’t have a very heavy REIT tilt. I really wouldn’t stress about it.
I’d trade it all for a little more | -C Montgomery Burns

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Re: REITS: Hold or Fold?

Post by HappyJack » Sun May 17, 2020 9:33 pm

If it was “up” right now I would still sell it and move into VTI for simplification. Its not enough of a tilt to make a difference, so I am seeking simplification.

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Re: REITS: Hold or Fold?

Post by Frasier2020 » Sun May 17, 2020 10:39 pm

With it only comprising 3% of your portfolio, I would just hold onto it and give it a chance to come back. DCAing out of it would be a good compromise, that way you could always suspend selling it if you felt comfortable with it again.

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Re: REITS: Hold or Fold?

Post by nix4me » Mon May 18, 2020 9:32 am

Stay the course.

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Complexity or Simplicity?

Post by Taylor Larimore » Mon May 18, 2020 10:35 am


I believe it is a mistake to hold less than 10% of any fund. The additional complexity is not worth the additional hassle of investigating, buying, rebalancing, record keeping, taxes, selling, and worrying about it.

If you hold a Total Market Index Fund you already own the market-weight in REIT stocks.

Please read my "Simplicity" link below.

Best wishes.
Jack Bogle's Words of Wisdom: "We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: REITS: Hold or Fold?

Post by Quaestner » Mon May 18, 2020 3:12 pm

While not all the advice given to you has been the same, I don't think any of it has been bad. Here's my 2 cents: Since you want to simplify, rip the bandage off now and put the REIT $ into VTI. By simplifying, you'll have less to worry about and time for more important things.

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