>>20604666I used to be into reits before I became a boglehead so I've got some pointers .
There are two groups of people that invest in reits. One are long term investment fags who use it as a proxy for real estate. The other are income fags. Back before the fed raised rates a huge amount of people used to invest in indices like VNQ and very popular reits like O, INVH, MMM, PLD, you name it. And because it was yielding around 1-2% more than the bond market people would chill in there for income. The second the fed rate pushed the interest rates above the REIT reits people dove out and took up bonds. That's the big reason its still down. All the income fags left. The second the fed so much as signals that we are at the top, income fags will dive into it again before the spike comes. VNQ is actually a fantastic proxy to gauge the markets perception of the fed's policy. While people are convinced the rate cuts aren't coming you can expect it to stay crabbing. Seriously it's been net negative for both the 1 year and the 5 year while S&P is up 25% and 86%. This means technically you can easily play it if you can predict the fed's policy better than the retarded market. But get ready to crab for a looooooong time if you go in too early.
That's a big reason the long term investors love it, it'll fucking crab forever at this artificial low and they scoop it into their ROTH IRA. Which yeah keep them in your roth. Because REITs are supposed to be how average (see poor) people invest in real estate its taxed like income. You will never get qualified dividends from a reit. Massively tax inefficient.
But that also means hilariously great for a tax free roth ira. Imagine being able to buy real estate, never having to pay taxes on it, and just using it to buy more real estate for like 20 years. It's so good even many bogleheads will sacrilegiously tilt to it
