REIT fund or emerging market?

Question

If you had a bit of $$ to invest today, would you go for a REIT or a diversified emerging market? The reason for those two choices is that I'm only putting a small amount since I tend to remain disciplined, and I want both these sectors in my ROTH but not more than 10% each for my portfolio.

But basically both have come down a bit but anyone think I should invest in one before the other? I'm just looking for extra imput I won't base my decision solely on the answers here. Thanks!

Answer 1

Emerging markets..

With the real estate bubble still bursting, its the worse of the 2 choices..

Answer 2

I'm looking at REIT as well.  I tend to be a contrarian, buying when a sector is bad, like financials (BAC, C).  Housing is down now and will be for the near term...SO prices should be down...a good entry point.    I believe people still want to live in a home if possible.

Already have 20% of my portfolio invested in a few international funds.

Answer 3

Nunya has a valid point there.  But emerging markets are not doing too well either. And not all REITs are created equal either.  There is such a wide variety of REITs that some may be immune to the real estate collapse.  For example HCP is one that might be immune.  

I do think that a diversified emerging market selection should be part of every Roth IRA and some have been beaten down significantly.  Perhaps more than is currently deserved.  One of the problems you will have with the emerging markets funds is that the things are sprouting like mushrooms.   It sort of makes it difficult to separate the wheat from the chaff.   Another factor to be aware of is that if you select an index fund, the holding are scewed towards large cap equites which does not make for a diversified holding.   In fact most diversified emerging markets funds all hold the same top 5 or 10 stocks.

Answer 4

Both could be fine.  It really depends on the individual fund/investment.  Look at the MERs or the fees you will pay.  Are they both free?  Go with the free one over the one with a fee or commission if possible.

Good for you for buying and holding!

That said, I'd probably go with the REIT because I really like monthly income - no matter what the market.

MoneyEnergy

http://www.getmoneyenergy.com