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  • #16

    My 2c. Sentiment and rotation probably.
    Pull up a very long term chart. VGSIX is still not at the level it was in 2008. Which means it was very pumped then. In 2008 REITS got juiced with all manner of financial engineering. This cycle is more like the late 90’s where REITS did poorly in a gradually rising low rate environment. Then as now tech is outperforming.
    REITS are probably good relative value now. In an inflationary environment rents should also rise. But you might have to wait for a while. Possibly until the next cycle starts before you see overperformance. There might be better things to invest in late this pcycle but they would be more risky too.

    Between REITS and cash, I’m not sure which I would prefer. The major choice is between these and tech currently. Do you want to participate more in a meltup or miss out on the party and the hangover ? If you have to buy more tech, better now than at the top. It could all fall apart anyday but doesn’t look to be. It’s very tempting. I am in two minds about putting a small stake on it. But that’s just my gambling tendency.

    I think the main risk if you bought more VGSIG or stay in cash, is watching tech and the general index melt up and feel you are missing out on this. Knowing my luck, the day I overweight tech is the day it starts going down the toilet.
    Click to expand...

    thanks.  that's helpful.



    • #17
      Aren't REIT yields  qualified as QBI deduction under the new taxation? I think they are, and if so then it may make a good move to move in now.


      • #18

        Real estate peaked June 2016; the same time TNX was at it’s low. Real estate dividends became a proxy for dividends when retirees were desperate for income. It is still working off it’s excess while bond dividends are rising.
        Invest now? can’t predict the future, but like ENT doc stated, the broad indexes include some real estate.
        Click to expand…

        Same reason all the “dividend growth investor” crowd has been chasing everything for years with a yield and trying to hide behind some kind of value philosophy while bidding up like mad companies with declining revenues and markets.

        In the last year or so, Im sure its just coincidentally with bond yields rising, theyve been crushed. They were, after all the rationalization, bond proxies.
        Click to expand...

        I am glad I no longer own GE, Altria, and IBM.