Starting off the new year with a few updates to clean up some loose ends. First off, new rebalancing rules - 20% relative threshold rebalancing now for all portfolios. Then, a look at my two asset changes last year: VPU supplementing VNQ and USMV taking some from PFF.
Maybe I have been approaching REITs wrong - maybe it’s the packaging that is the problem, not the REITs themselves. In this test, I took an unusual approach (for me) - chose ten individual REITs to see how they might compare. Good news: better than VNQ. But there’s a catch…
I hinted at this in my VNQ post - while I do invest in VNQ and DFREX, I am not altogether sure I should. Should I have an overweight allocation to REITs beyond what I’d get anyway in broad index funds? Are REITs a distinct asset class? Do they belong in an RP portfolio?
Although I have long invested in REITs, I’m actually undecided about whether they are a unique asset class and if they deserve an allocation in a RP portfolio going forward. That being said, Vanguard’s Real Estate ETF (VNQ) is my preferred way to invest in REITs…for now.
