Valuethinker wrote:What is striking about that graph is that REITs are not yet, quite back to their 2002 levels.
16 months into the worst financial crisis of the postwar years, arguably, REITs haven't yet retested their lows.
I have worried about this, before plowing a huge chunk of my portfolio into VNQ, which was at 0%.
My rationale is that
(1) Perhaps REITS were unappreciated and undervalued for years, like TIPS when first issued.
(2) Yield. That peak yield is so high, that when it gets back to peak again, I should do quite well.
I could easily be wrong, or just very early.
Valuethinker wrote:I would be interested in a graph of REIT dividend yield going back-- not sure how to generate one.
If you succeed, please post. Here's a couple things I have:
Hate to use Yahoo as a data source, but it does offer dividend data back to '96, not very long term.
http://finance.yahoo.com/q/hp?s=VGSIX&a ... f=2008&g=v
Here's an indication that recent high yields may
have been in the early 90's, at 7%: http://www.nareit.com/portfoliomag/06mayjun/feat3.shtml
In the early 1990s, the average REIT yield was around 7 percent.
Valuethinker wrote:In what is likely to be a brutal recession in Commercial RE, you probably want something like an 8-9% yield to compensate you for the likely years of negligible capital growth.
It's above that now, for sure. You can calculate it easily from the Vanguard website, distributions tab.