Real Estate Investment Trust



REITs are companies that own or finance income-producing real estate including residential mortgages, commercial properties, and even timber land.  Their stocks offer individual investors a highly liquid method of investing in properties that would otherwise be cost prohibitive to purchase on their own.

While REITs are technically a subset of stock, I include them in “Other” because the specific real estate exposure they offer often more resembles a commodity.  One should note, however, that various stock market funds also include REITs as part of their index.  So be sure to learn the REIT percentage already in your other funds before loading up on more.


Index Funds

Source Data
  • 1970-1971: Total Stock Market, R*
  • 1972-1996: FTSE NAREIT All Equity REITs, P
  • 1997+: Vanguard REIT Index Fund (VGSIX), P

(*) Good REIT data is not available until 1972.  Before that, I use the Total Stock Market as a replacement asset.  This is admittedly only a very loose approximation, and only small doses of REITs will avoid setting off the “estimated” tag in the calculators prior to 1972.


Portfolios with REIT assets