Supplement portfolio with REIT Index?
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Supplement portfolio with REIT Index?
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!
Re: Supplement portfolio with REIT Index?
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.
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.
- jasonlitka
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Re: Supplement portfolio with REIT Index?
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.
Jason Litka
- ruralavalon
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Re: Supplement portfolio with REIT Index?
I see no problem with that. Our portfolio targets REIT at 5% overall, 10% of equities, 14% of domestic equities.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?
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- White Coat Investor
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Re: Supplement portfolio with REIT Index?
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?
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- ruralavalon
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Re: Supplement portfolio with REIT Index?
We did buy many REIT fund shares at bargain prices in 2007-2009.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?
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
- bertilak
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Re: Supplement portfolio with REIT Index?
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.
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.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Supplement portfolio with REIT Index?
Thank you for your kind replies. Happy and healthy 2012 to all...Cheers!!!