It is increasingly likely in todays world that your retirement preparation will involve a defined contribution retirement plan: a 401(k) or other similar tax-sheltered savings program. This means that YOU must assume responsibility for the composition of your retirement assets. Common advice for your portfolio is to rely heavily on index funds rather than individual stocks or actively managed mutual funds, and avoid short-term strategies such as attempted market timing. Thus you may emphasize index funds based on such stock indices as the S&P 500, the Russell 2000 indices, the Wilshire 5000, or bond index funds, etc. Being in a real estate class raises an additional possibility: if you are not investing directly in rental real estate not a good choice for most persons - or if you are not investing in a private real estate fund, should your portfolio include REITs? If you own a home, does this constitute a sufficient real estate investment? The purpose of this exercise is to give you a start with information needed to explore these kind of questions.

The exercise will rely heavily on the website of the National Association of REITs, NAREIT (www.reit.com). The good news is that though one might expect a trade association website to lean toward their sponsors, this one remains remarkably if not completely unbiased and informative. It offers a rich and accessible array of REIT explanations, guides, data and REIT links.

The first reference for you to follow on the NAREIT site is as follows: https://www.reit.com/data-research/research/third-party-research REIT Stocks: An Underutilized Portfolio Diversifier, by Rubin, Buller and Wald. While the authors are portfolio managers affiliated with Fidelity, they present an accurate, thoughtful and informative case for including REIT funds in a diversified portfolio. Read this to answer one of the questions below.

1. General REIT Questions (see REIT Industry Snapshot on the NAREIT website under Data & Research.)

What is the market capitalization of NYSE traded REITs today?

How many NYSE traded REITs are there today?

According to Buller, Wald and Ruben, what are the attractions of including REITs in a pension portfolio? (Expand the space as needed.)

2. Specific REIT Fund Questions

From the following link on the NAREIT website,

https://www.reit.com/investing/investing-reits/list-reit-funds (select By Fund, and by Table)

Select the By Fund option and, on the right, select Table. Then select a REIT Index fund (either Fidelity FSRVX or Vanguard VGSLX). Finally, browse and select one non-index REIT fund, and answer the following questions.

The best location for complete answers to the questions is likely to be from the fund prospectus (search for it by fund name) and Yahoo Finance: https://finance.yahoo.com In Yahoo Finance, locate your fund by it ticker symbol through the search line at the top of the page. For returns select the Performance tab.

Annual Return:

1 year return 5 year return 10 year return Expense ratio

S & P 500 Index Fund

Vanguard 500 Index Admiral 16.59% 15.50% 7.31% 0.04%

Your REIT Index fund

Your REIT non-index fund

Risk:

For risk measures in Yahoo, select the Risk tab.

Using standard deviation (volatility), compare the risk of the REIT funds to the S & P Index:

S & P 500 Index volatility (VIX index) 10.35% annualized (7/26/2017)

Your REIT Index fund

Your REIT non-index fund

Underlying composition:

Select the Yahoo tab for Holdings

From the non-index REIT fund you have selected, list the ten major component REITs and their percentages of the fund: (In addition to Yahoo Finance, You also may be able to find this information from the fund website.)

Select one of these ten REITs and describe its assets in a paragraph.

3. From the home page of the NAREIT website, examine the section on Investing and the section on Data & Research. Find one subsection that you find of interest and comment briefly on what is in it.