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Related RE article: "In a rising market, REITs also have some of the same challenges as directly owned property. “The REIT market is very volatile, down 75% between 2007 and 2009 — which was terrific if you were in a rebalancing situation — and then up 400% from that bottom,” Haraway says. “I handle REITs as maybe 10% of a portfolio. REITs tend to lead the other indexes and provide some diversification.”
Along with volatility, REITs also carry interest rate risk, Altfest points out, and aren’t always available at favorable prices. “We’re value investors, and a lot of money is chasing REITs. Valuations are high and yields are low,” he says.
Instead of (or in addition to) REITs and direct real estate ownership, Altfest suggests private partnerships, in which a group of people pool money to make a real estate buy and pay for its professional management."
“The REIT market is very volatile, down 75% between 2007 and 2009 — which was terrific if you were in a re-balancing situation — and then up 400% from that bottom,”
I wanted to create a picture of the above quote using a personal investment ( I experienced this with VGSIX). I wanted to highlight the recover time (shown in the form of a triangle).
It is this the period of time (recovery from maximum Draw Down or MAXDD) an investor wants to shorten if possible. Six years was a long time to wait in my opinion.
Comments
"In a rising market, REITs also have some of the same challenges as directly owned property. “The REIT market is very volatile, down 75% between 2007 and 2009 — which was terrific if you were in a rebalancing situation — and then up 400% from that bottom,” Haraway says. “I handle REITs as maybe 10% of a portfolio. REITs tend to lead the other indexes and provide some diversification.”
Along with volatility, REITs also carry interest rate risk, Altfest points out, and aren’t always available at favorable prices. “We’re value investors, and a lot of money is chasing REITs. Valuations are high and yields are low,” he says.
Instead of (or in addition to) REITs and direct real estate ownership, Altfest suggests private partnerships, in which a group of people pool money to make a real estate buy and pay for its professional management."
real-estates-new-rules
I wanted to create a picture of the above quote using a personal investment ( I experienced this with VGSIX). I wanted to highlight the recover time (shown in the form of a triangle).
It is this the period of time (recovery from maximum Draw Down or MAXDD) an investor wants to shorten if possible. Six years was a long time to wait in my opinion.