Business is Personal (Finance)

If somebody opened up a Wall Street themed amusement park, a REIT rollercoaster would be one of the most harrowing rides. If you were monitoring the VGSIX/VNQ on a regular basis, here is what the monthly fluctuations looked like:

When looking at percentages, negative returns have a bigger impact than positives of the same scalar so the cumulative return adds up like so:

Not very nice looking numbers for somebody who decided to get on the ride late 2006 or early 2007. Unfortunately, that's when I switched to indexing and randomly picked VGSIX as one of my options. I did keep buying more and more using monthly contributions and then threw in big lump sums early 2009. In gambling, this is called "doubling down" -- in investing, we call it rebalancing, tactical asset allocation and other fancy names. Basically, I kept shovelling money in as fast as the sink hole kept collapsing.

A graph of my REIT holdings the past 3 years:


The graph shows the YELLOW line meeting back up with the RED line after a wide separation from August 2008 until the end of 2009. This time, I've come away from the table with my money back and an inexpensive lesson learned. Hence, the first transaction I made in 2010 was to rebalance my REIT holdings to get it back in line with my asset allocation.

(Filed in investing)