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My (Al Z) Approach to REITs: ETFs

My (Al Z) Approach to REITs: ETFs. I use US and International REITs as 2 of the 10 asset classes I allocate my funds across Assume non-correlated to other assets (in general true - not so true since the ‘07 time frame)

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My (Al Z) Approach to REITs: ETFs

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  1. My (Al Z) Approach to REITs: ETFs • I use US and International REITs as 2 of the 10 asset classes I allocate my funds across • Assume non-correlated to other assets (in general true - not so true since the ‘07 time frame) • Include are R.E. related items: e.g., home builders, infrastructure builders, mortgage REITs • I take a “Core and Explore” approach - limited by REIT selections in 401Ks, etc. • Core via ETFs, CEFs or MFs; Explore with specific REITs • Instruments: CSRIX, ITB, RNP, VNQ/IYR, REZ, TAO, RWX, IGF, PXR, REM • Selection of ETFs in this area is somewhat limited (short histories, limited liquidity ($1M/day), multiple look-alikes) • For the core: I time with a 10 month SMA to be in REITS or in cash/bonds • If long REITS I choose the top 3-5 ETFs based on near-term gains (combination of 1, 3, 6 and 12 month gains) • I also have a “Best REIT ETF” based on Sector Surfer (see next page) AAII SV

  2. My (Al Z) Approach to REITs: ETFs Reasonable AAII SV

  3. My (Al Z) Approach to REITs: Stocks • For the “explore” part of the portfolio I choose 12 US REITs. • These 12 REITS are timed via a 10 month SMA on the IYR • These REITs are chosen by what a friend calls his “Jack Welch screen” • Daily trading volume > $1M (liquidity test) • Take the Top 12 REITs by their revenue (“Buy the Biggest”) • Rotate/update the 12 REITS once per year (on 12/31/xx) or whenever the timing signal signals a buy condition • Following slide shows the performance of IYR, the timed IYR and the timed 12 REIT portfolio • I have been running this portfolio for 2+ years at present getting similar results to the back test. AAII SV

  4. My (Al Z) Approach to REITs: Stocks Key: Black IYR B&H Blue IYR Timed Red 10 12 REITs by Rev Timed MDD 22% Calmar: 0.55 AAII SV

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