REITs - Real Estate Investment Trusts - Info & Discussion
- radiodude
- bob90245
- Happy_2
- allancoleman
- azxcvbnm
- Normxxx
- Normxxx
- bob90245
- lcha
- allancoleman
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» radiodude - Re: Re: oops, there goes my REIT
In response to message posted by allancoleman:hmmmm, I hadn't thought about selling it, but if I were to sell it, it's in my IRA so I would not pay any taxes (for now) on the earnings or cap gains if I sold it.
I'll have to think about this. I'm not much of a market timer which is why I was going to hold RWR basically forever.
..
-- posted by radiodude
» bob90245 - Re: Re: Re: oops, there goes my REIT
In response to message posted by radiodude:Vanguard had a good article in their newsletter awhile back.
http://flagship2.vanguard.com/VGApp/hnw/...
Here's an excerpt:
"In reality, interest rate changes are never good or bad. Because of the inverse relationship between bond prices and bond yields, they're good and bad. When interest rates fall, the resulting rise in bond prices boosts returns in the short term, but longer-term returns can suffer. That's because the lower rates translate into lower returns on future investments. Conversely, when interest rates rise, the short-term pain caused by falling prices can eventually be salved by higher returns on reinvested income."
radiodude,
Unfortunately, your REIT is an exchange traded fund and not a regular mutual fund. And correct me if I'm wrong, your dividends aren't being reinvested. So you won't get the benefit of reinvested dividends as would be the case in a mutual fund (VGSIX for example). Keep in mind that since dividends make up a good portion of the long-term total return, the concept of reinvesting dividends is applicable to both bond mutual funds and REIT mutual funds. However in a REIT mutual fund, that would be less so.
For me, holding VGSIX is just one part (5% to 10%) of my overall diversified stock portfolio. I like the idea of the Coffeehouse portfolio.
-- posted by bob90245
» allancoleman - Re: Re: Re: oops, there goes my REIT
In response to message posted by radiodude:radiodude ,
i used to think investing was forever . i own the fidelity magellan fund ( FMAGX ). it was over $ 145 a share . it has now struggled back to $ 101 a share . i may NEVER get back to where i was before this secular bear market began if we are in a cyclical bull market rally now and the secular bear market resumes later this decade .
i own the gateway fund ( GATEX ) . i paid $ 23 a share for it because i was going to throw more money into the market in 2001 because " buy on the dips " . i watched it go to $ 18.50 a share . i've now struggled back to $ 23.49 a share with alittle bit of profit to show for three years of investing . you think i'm going to ride this puppy down again ? ?
both of these funds have really done well in this cyclical rally and i'm in no hurry to sell either one right now . but i certainly don't intend to ride them down again .
forever ? ? i've removed that word from my investing vocabulary . it's not a question of market timing . it's a matter of protecting your profits and putting your money in other asset classes . mdorsey on the bond forum is STILL showing people that bought and held the s & p 500 since december 31 , 1999 as being underwater at this time in SPITE of this excellent rally we've had this last year .
as i said before it's YOUR money . as for me , with MY money , this second go round i'm going to watch it alittle closer this time . fortunitely we're only talking 10 % of my asset allocation . the rest has continued to show positive returns . but just think how much better i could have done if i had protected my profits .
just my feelings .
-- posted by allancoleman
» azxcvbnm - Re: Re: Re: oops, there goes my REIT
In response to message posted by radiodude:I think you significantly underestimate the risk of REIT's, and how much they can fall. Look at the past few years performance and you'll see that REIT's have exploded as real estate prices in general have gone up and up. Investors have also poured money in to chase the yields which are better than most stocks and are comparable to bonds. If the real estate market were to collapse, you'd see losses of 30%. How much more can real estate prices go up? You have to ask that question because you are certainly not in it for the yield. If you are, then why not move to a safer short-term bond fund? The intermediate GNMA fund is also relatively safe, and yields near 4.7%. This isn't about market timing, but how much risk you're willing to take. I'd say the same thing if REIT's were up 20% this year.
-- posted by azxcvbnm
» Normxxx - Re: Re: Re: Re: oops, there goes my REIT
In response to message posted by allancoleman:Very well stated, allancoleman.
Your sentiments are shared by at least a couple of hundred thousand others. What makes you think everyone can get out the door at the same time, next time? I believe, the last times that was tried were in 1987 and 1997. Even 2000 and the summer of 2002 were fairly fast exits.
-- posted by Normxxx
» Normxxx - Re: Re: Re: Re: oops, there goes my REIT
In response to message posted by azxcvbnm:It is generally agreed that REITs are sporting about a 15% - 20% premium above their RE values.
I just reduced my REITs 50% as I do not see any further upside, but lots of downside.
The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only.
-- posted by Normxxx
» bob90245 - Q: Historical Annual Returns for REIT Index?
In response to message posted by azxcvbnm:azxcvbnm said: "If the real estate market were to collapse, you'd see losses of 30%."
I'm trying to get long-term annual returns for the Vanguard REIT index fund (VGSIX). What I found only goes back to 1994:
http://finance.yahoo.com/q/pm?s=VGSIX
Worst 1-Yr Total Return (1998): -16.32%
Worst 3-Yr Total Return (1997-2000): -1.57%
Does anyone know where can I get annual returns for a REIT index going back another decade or two?
-- posted by bob90245
» allancoleman - Re: Re: Re: Re: Re: Re: oops, there goes my REIT
In response to message posted by lcha: must be everybody headed for the door at the same time as Normxxx mentioned . better think fast radiodude before the horse is out of the barn . after the n.a.v. drops enough , you'll be a long term holder weither you like it or not 
. just like i am in my magellan fund . at least i can sell my gateway fund at a profit now . my magellan fund investment (
? ) may take many more years .
-- posted by allancoleman
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