Supplement portfolio with REIT Index?

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golfallday
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Supplement portfolio with REIT Index?

Post by golfallday »

Very grateful for the help the members have given me on these boards. Everytime I visit the site, I learn something new....indeed, I'm an amateur at this. I use VIIIX and VBTIX in my 457 plan; I use VTHRX for my Roth IRA. (I try to keep it simple!) Total portfolio is currently 73% stocks and 27% bonds. I'm comfortable with that mix as I have 25 years to retire and I should have a nice pension when I pull the plug. Does anybody see a problem with me selling off some VTHRX and buying VGSLX so that REITs make up 10-15% of the stock portfolio? Happy and healthy 2012 to all. Cheers!
dbr
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Re: Supplement portfolio with REIT Index?

Post by dbr »

I don't see a problem with doing it and I don't see a problem with not doing it. The idea is the REITs do not cause a tax problem by being in the Roth.

A different issue that might be a problem is at what point does the investor arrive at a stay-the-course asset allocation. It would not be good to decide on 10%-15% REITs now and decide on no REITs later on.
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jasonlitka
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Re: Supplement portfolio with REIT Index?

Post by jasonlitka »

My REIT allocation is 5% of my total portfolio. That works out to about 13% of my domestic stock and about 7% of my total stock. Optimistically, I've got 30 years before retirement. I think you'll be fine.
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ruralavalon
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Re: Supplement portfolio with REIT Index?

Post by ruralavalon »

Does anybody see a problem with me selling off some VTHRX and buying VGSLX so that REITs make up 10-15% of the stock portfolio?
I see no problem with that. Our portfolio targets REIT at 5% overall, 10% of equities, 14% of domestic equities.
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White Coat Investor
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Re: Supplement portfolio with REIT Index?

Post by White Coat Investor »

Smells of recency bias. Would you like to step back with me to 2007-2009 when I lost 75% of the money I had in REITs?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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ruralavalon
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Re: Supplement portfolio with REIT Index?

Post by ruralavalon »

EmergDoc wrote:Smells of recency bias. Would you like to step back with me to 2007-2009 when I lost 75% of the money I had in REITs?
We did buy many REIT fund shares at bargain prices in 2007-2009.
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bertilak
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Re: Supplement portfolio with REIT Index?

Post by bertilak »

I think REITs are a reasonable asset to have in your portfilio.

Only thing to be careful of is that other stock indexes already contain REITs so if you put, say, 10% of a REIT fund in your portfolio you could end up with more REITs than you planned on. If I looked up your funds correctly you have a large cap fund for your equities and that probably doesn't have many REITs in it, if any. Couldn't hurt for you to check. Morinigstar can tell you what stocks are in a fund -- look at the Xray feature. May need Premium subscription.
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Topic Author
golfallday
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Re: Supplement portfolio with REIT Index?

Post by golfallday »

Thank you for your kind replies. Happy and healthy 2012 to all...Cheers!!!
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