Trump 2.0

[94aggie]

This is great information. One thing that comes to mind is that the current I fund is way different than the I fund of 2017. Any thoughts on this fact? does the fact that a totally different I fund today even matter ? hhmmmm

[jimcasada]

Interesting. Also, last time around stocks in alternative energies surged unlike oil (etc.). I have a feeling this time around, however, things are going to be different. Last time Trump received an excellent economy in top shape, many years after the last crisis. This time we're not much after COVID and the ensuing high inflation. I'm in the camp of expecting something akin to 1974/5 or perhaps 2001 to 2003...but as always hoping for the best. That's why I was really hoping to see how the strats would have performed in the 2000 to 2003 period.

Having said that, i did ask the TSP folks to give me the data on the S Fund (DWCPF). So far I've had no response. All others (SPX, EAFE, etc.) I can find without much hassle.

I can only see the DWCPF chart going back to March 2006. Did we have a S-fund before 2006? I think I started my first TSP account in 2002, but I don't remember what funds were available back then. The Russell 2000 chart generally runs similar to our S-fund.

[Bubba]

Interesting. Also, last time around stocks in alternative energies surged unlike oil (etc.). I have a feeling this time around, however, things are going to be different. Last time Trump received an excellent economy in top shape, many years after the last crisis. This time we're not much after COVID and the ensuing high inflation. I'm in the camp of expecting something akin to 1974/5 or perhaps 2001 to 2003...but as always hoping for the best. That's why I was really hoping to see how the strats would have performed in the 2000 to 2003 period.

Having said that, i did ask the TSP folks to give me the data on the S Fund (DWCPF). So far I've had no response. All others (SPX, EAFE, etc.) I can find without much hassle.

I can only see the DWCPF chart going back to March 2006. Did we have a S-fund before 2006? I think I started my first TSP account in 2002, but I don't remember what funds were available back then. The Russell 2000 chart generally runs similar to our S-fund.

On the old TSP website it said that they used the Russell 2000 as their S Fund index before 2003. In either 2002 or 3 they switched to DWCPF. The difference between both is that DWCPF tends to be more midcap than smallcap. It also tends to include useless companies (my opinion) which makes the DWCPF less reliable. The thing that interested me is that they show monthly returns to DWCPF starting in May 2001. They actually don't show the index in more detail until about 2003. So, if they have the monthly returns for DWCPF, then surely they have the daily returns...which is what I was hoping I would get. Sadly nothing yet.

[Bubba]

This is great information. One thing that comes to mind is that the current I fund is way different than the I fund of 2017. Any thoughts on this fact? does the fact that a totally different I fund today even matter ? hhmmmm

It's "bit" different now. I think some of the weighting now includes 10 to 15% of different emerging markets, but overall the 2 big economies (Japan and the UK) are still overweighed within the index (by quite a bit).

[jimcasada]

Interesting article I ran across on tariffs (dated about 8 months ago, before the election): https://news.harvard.edu/gazette/story/ ... e-country/

[Bubba]

Interesting article I ran across on tariffs (dated about 8 months ago, before the election): https://news.harvard.edu/gazette/story/ ... e-country/

Thanks. Excellent article. I shared it with friends and colleagues.

Sadly, I think the vast majority of people aren't informed on the exact impact of tariffs. While historical references abound (e.g. Smoot Hawley period), the "this time's different" crowd always wins. Ironically, that's how investing works too.

Good luck to everyone.

[jimcasada]

Ok, the more I think about it, I believe the economy may be returning another period of high inflation soon (at least until this Trump transition settles down). Traditionally, real estate is usually a good place to be during inflationary times, but at today's rates I would rather not go out and buy some property (I don't want to be a landlord either). That got me thinking about REIT's (real estate investment trusts). So I ran across this article on REIT ETF's. Does anyone have any experience or suggestions about investing some of my IRA money into a REIT ETF?
https://money.usnews.com/investing/arti ... to-buy-now

[bloobs]

Ok, the more I think about it, I believe the economy may be returning another period of high inflation soon (at least until this Trump transition settles down). Traditionally, real estate is usually a good place to be during inflationary times, but at today's rates I would rather not go out and buy some property (I don't want to be a landlord either). That got me thinking about REIT's (real estate investment trusts). So I ran across this article on REIT ETF's. Does anyone have any experience or suggestions about investing some of my IRA money into a REIT ETF?
https://money.usnews.com/investing/arti ... to-buy-now

What's your rationale behind RE being a good place during high inflation? Inflation means high loan rates, high seller prices--all the while buyer incomes lagging even more, as has been the case the last 2 years. Seems to be a net negative for both buyers who cant unload and buyers who cant afford.

Commercial RE is just if not worse since remote work and entertainment boom.

[jimcasada]

Ok, the more I think about it, I believe the economy may be returning another period of high inflation soon (at least until this Trump transition settles down). Traditionally, real estate is usually a good place to be during inflationary times, but at today's rates I would rather not go out and buy some property (I don't want to be a landlord either). That got me thinking about REIT's (real estate investment trusts). So I ran across this article on REIT ETF's. Does anyone have any experience or suggestions about investing some of my IRA money into a REIT ETF?
https://money.usnews.com/investing/arti ... to-buy-now

What's your rationale behind RE being a good place during high inflation? Inflation means high loan rates, high seller prices--all the while buyer incomes lagging even more, as has been the case the last 2 years. Seems to be a net negative for both buyers who cant unload and buyers who cant afford.

Commercial RE is just if not worse since remote work and entertainment boom.

Ok, to research this, I found a CPI chart from Jan 2020 to Apr 2024, and created a chart of those six REIT ETF's listed in that article using the same time frame to compare them to (I wish that could have put all on the same chart, but Schaub would only let me do ticker symbols). I think it's interesting how most all of these ETF's peaked out just before CPI peaked out around early2022.

[jimcasada]

I just realized these charts are hard to read as posted on here. Basically, it looks like most of these ETF's went up nearly 40% from their 2021 lows to their 2022 highs, while the CPI annualized rated went up about 8% during that same time frame (the charts appear skewed because they represent different percentage scales).

[Bubba]

I have a report from Bank of America that shows how returns fared over different decades. REITs as you posit, did quite well in the 1970s due to inflation. I can't upload the file...it's over 4 megs, but this one's really interesting. The 1970s piece is quite telling and most likely what we're going to experience over the next 5 to 10 years or so.

Enjoy!

Best,

Bubba

[bloobs]

What's your rationale behind RE being a good place during high inflation? Inflation means high loan rates, high seller prices--all the while buyer incomes lagging even more, as has been the case the last 2 years. Seems to be a net negative for both buyers who cant unload and buyers who cant afford.

Commercial RE is just if not worse since remote work and entertainment boom.

Ok, to research this, I found a CPI chart from Jan 2020 to Apr 2024, and created a chart of those six REIT ETF's listed in that article using the same time frame to compare them to (I wish that could have put all on the same chart, but Schaub would only let me do ticker symbols). I think it's interesting how most all of these ETF's peaked out just before CPI peaked out around early2022.

Oh ok. I didn't realize you were scoping it down to just REIT ETFs. For me, I still don't understand why REITs would have done well during that period.

[jimcasada]

I don't understand it either, but I don't think they are just going out and taking out mortgages from banks. I think it's more like they buy & sell, and manage rental properties using their investors money. I was hoping somebody here had some experience with REIT's?

[Bubba]

I don't understand it either, but I don't think they are just going out and taking out mortgages from banks. I think it's more like they buy & sell, and manage rental properties using their investors money. I was hoping somebody here had some experience with REIT's?

I think I misunderstood your question. A few years ago I spent an enormous time on researching REITs. Some of that has been forgotten. A couple of nuggets that I did gain I'll throw your way to do with as you please:

1. I learned very quickly that not all ETF REITs are alike. The problem is the index they follow. Many REIT indexes accept too much junk. Here's a link to comparing some index returns https://www.bogleheads.org/wiki/US_equi ... ex_returns.
2. Having said that, my favorite REIT index is the FTSE NAREIT index (https://www.reit.com/data-research/reit-indexes). I believe that XLRE follows this index...but I haven't checked in a few years, so you'll need to double check. When I compared the different indexes, the NAREIT index was MUCH better over time, than the others.
3. Some other index/ETFs to check are the Pacer ETFs. https://www.paceretfs.com/. Their indexes have been doing really well...but they are quite focused on very specific areas.
4. What I did those years ago, was go to Seeking Alpha and follow a bunch of REIT authors (before they implemented their annoying pay wall). I learned a lot from reading the different authors. What I learned most importantly was that REITs (for the most part) are already quite diversified, so then I began researching REITs according to what I thought would be best. So, I created my own index back then, using FSMEX as my benchmark. I quickly found some of the typical/popular REITs to be less interesting (for example O). I had the requirement that they had to be around for at least the time period that FSMEX was around and that they had to match or beat that benchmark. I widdled by choices down to like 10 to 15 REITs. Every year I check to see if they still beat my benchmark and if so, they stay in the mix. If not, then I throw them out and look for others to replace them. Since those years ago, I've added a ton of other stocks into the mix (always dividend paying stocks), so now my system is all jumbled up.

So, a quick summary is that what I do is research the different REIT stocks, compare them to my benchmark (FSMEX) and then buy accordingly. It's worked out so far.

Best,

Bubba

[jimcasada]

Ok Bubba, I added your $XLRE, along with the other six, to my REIT follow list. Looking at the past year's chart, I don't see much difference in any of these ETF's, except maybe for $REM (which seems to be more volatile, but still follows the same pattern). Anyway, they all seem to take a dip last Thursday, so I bought some $SCHH & $PSR with my ROTH IRA (just because they took the bigger dip). We'll see how this experiment works?