So I have been building out my Taxable Portfolio for the last few months and incrementally buying Fidelity Total Market (FSTVX). My IRA is full of Bonds (FSTIX) and my 401K is full of Total Market and Bonds. The only area I can add $$$ to would be taxable with Fidelity.
I have considered keeping putting money into FSTVX but have really wanted to get exposure to real estate. My wife wanted to buy some more property in Houston to rent out but I think I can get better returns from buying into REITS.
Are REITS a NO NO to put in a taxable account? I am in the 33% Tax Bracket so I potentially could take a big hit. Thinking of about 5-10% of portfolio in Real estateIt seems like I could buy into Funds at Fidelity including one Index.
Fidelity Real Estate Index Fund - Premium Class (FSTVX)
https://fundresearch.fidelity.com/mutual-funds/summary/316146240FidelityŽ Real Estate Income Fund (FRIFX)
https://fundresearch.fidelity.com/mutual-funds/summary/316389865FidelityŽ Real Estate Investment Portfolio (FRESX)
https://fundresearch.fidelity.com/mutual-funds/summary/316138205Furthermore I read an awesome post on Reddit copied below that really laid out other types of REIT Funds on the market. Any comments on the ones below
1. Equity Residential (EQR), although I think we are closer to the top of the cycle in terms of apartments. Sam Zell sold off 23,000 apartments in this REIT and - earlier this year - paid a special dividend. If you have a long-term view, this is a well-run REIT focused on apartments in space constrained major cities. However, I'd really wait for a significant pullback.
2. Vornado (VNO). One of the oldest REITs and quite well-run, owning a hefty amount of DC and NYC real estate. The issue, however, is that while they own a ton of extremely high quality NYC real-estate, the company is certainly not diversified. I do think Vornado is overvalued at the moment and getting it in the mid $80's would be more appealing.
3. Tanger Outlets (SKT) I fucking hate the mall, but I do think that the "high end outlet" concept has a lot of appeal to people seeking value. Tanger is the only "pure play" on this.
4. QTS (QTS), Coresite (COR), Equinix (EQIX), Digital Realty (DLR) and others. The Data Center REITs - in my opinion - are the most appealing REIT sub-sector, as I think they are absolutely a long-term growth story. That said, they've run up a good deal, too. Equinix 5. (EQIX) went from a bit over $300 to $260 in February, then proceeded to ramp to $330. Coresite (COR) and QTS (QTS) also ramped significantly after the decline earlier this year.
5. Realty Income (O). Consistent, predictable triple net REIT that has paid dividends monthly for many years. I think it's run up much too much lately and would be more appealing if it got back to the mid-50's.
6. Ventas (VTR): High quality, well-managed healthcare REIT.
7. American Tower (AMT), Crown Castle (CCI). The cell tower REITs. I'd rather the data centers, but this pair (CCI being us-centric, AMT being global) are worth consideration.
8. Prologis (PLD). Terrible 2008, but the company has rebounded. Amazon being a large customer. They have benefited from e-commerce.
9. Retail Opportunity (ROIC). Again, I don't care for the mall, but this is a smaller, well-run REIT focusing on malls with need-based anchor stores.
10. EPR (EPR) Entertainment focused REIT. Not something you would own if you think that moviegoing in the future is people sitting at home with VR helmets or if you think moviegoing in general is gradual decline either way. They do own schools, entertainment venues (waterparks, indoor golf and other recreation centers) but a lot of movie theaters. Not for me, but has been well-run over time and pays a monthly dividend. If you are positive on moviegoing going forward as well as discretionary dollars going towards new kinds of recreation/entertainment places, I'd much rather point someone to this than owning one of the theater chains. No, this is not all theaters, but if you are positive on moviegoing, you are likely positive on recreation/entertainment dollars and while not a moviegoing "pure play" and not for me, terrific dividend here, paid monthly.
11. SL Green (SLG, volatile) and Boston Properties (BXP, wait for pullback) are a couple of others that come to mind. Equity Lifestyle (ELS) is another, which owns a lot of property on or near waterfront. ELS would definitely be more appealing after a meaningful pullback.