Yesterday the REA closed at $314.5345. Today it closed at$314.42 - a DECLINE of

$0.1145! Quite an accomplishment with the 7+% increase in VNQ!

Well, at least I have moved 99% of my funds out of it!

Ray

Yesterday the REA closed at $314.5345. Today it closed at$314.42 Well, at least I have moved 99% of my funds out of it!

So much for that theory. I also moved 99.9875% out of it. The other .0125% went down a black hole.

Sy

Boo TREA!

While  I think I calculated that there's an average of 2.5 "bad surprises" per month (i.e., where REITs go up and TREA goes down) that's obviously a /very/ bad surprise . . . still, the thing does have REIT's in it so perhaps today's the day they snuck in that 70% write off for the building in San Francisco they're claiming on their taxes :  )  There's certainly no rule I know of that says they can't do something like that if they want . . .

All best,

Pete
 

The "noise" is about how badly financials have been beaten down and how Sec. Paulson and Mr. Bernanke are trying to make reassuring noises to the financial community.  Both made strong commitments today which, in the current environment, should last for about 24 hours. :-)

I'm also surprised by the "surprise" in TREAs not participating in the REIT pop.  I mean, do you need further confirmation that TREA has slim holdings in REITS?  Is it really news that the fund has flatlined and likely will do so for an uncertain period of time.

Unfortunately, trees don't grow to the sky, and neither do commodity funds, or TIPS funds, or precious metals funds, or energy funds, or emerging markets funds, or....[fill in the blank].  Hey, maybe the latest "tilt" gambit is away from small value or large growth to a version of stable value--i.e., TIAA Traditional.  But that should be in any retiree's portfolio to start with IMHO.

As the good book says, for everything there is a season, but will you know when the "season" has changed?  Bob U.

P.S. Is anyone out there a long-term investor?

Yes, I am a long term investor but I take what the market offers and now it is offering me the Traditional and at present I certainly prefer it over the REA. As Pete likes to say, one can time the REA and its time is not yet - for me that is.

Ray

If a lot of people are leaving TREA, there is an advantage for T/C to keep the unit value low.

A high interest rate in traditional would entice these people to move their redemptions to that account, rather than to another company.

Dick 

Hi All,

It'll certainly be interesting to look at recent inflows and outflows whenever they publish them, though I'm guessing they'll have bigger problems with outflows from their other accounts than from TREA . . . as for timing TREA, I don't know if we have enough evidence of people successfully timing it over the long term to say it "can" profitably be done (particularly as IIRC Traditional wasn't as attractive during the last downturn/slowdown earlier in the decade) but for conservative investors switching between TREA and the still more predictable Traditional account I do definitely think it's "worth a try."

All best,

Pete 

Pete,

What fund flows will tell us is what has already been confirmed repeatedly: many "investors" chase performance and end up buying high and selling low (though we do agree that TREA tends to move at such a snail's pace that it is as good a candidate as any for some form of timing).

Here's a recent exchange about this matter from the Morningstar site, with Valueinvestor of Boglehead fame participating.

 http://socialize.morningstar.com/NewSocialize/forums/thread/2534638.aspx

Bob U.

 If a lot of people are leaving TREA, there is an advantage for T/C to keep the unit value low. A high interest rate in traditional would entice these people to move their redemptions to that account, rather than to another company.

Dick,

This sounds like a conspiracy that's not happening. That kind of manipulation is illegal, to say the least.

Sy

Respectfully disagree, Sy (please don't see red :-)

This long-term investor put together a diversified long-term plan in recognition of my ignorance of the future--ignorance from every standpoint, including future investment returns.

I do very much agree with you that any manipulation of NAV is not only unethical and illegal, but the idea itself strikes me as not credible. Bob U.

This long-term investor put together a diversified long-term plan in recognition of my ignorance of the future--ignorance from every standpoint, including future investment returns.

Bob,

I may have overstated my short-term stance. Buying stable and guaranteed returns are also long-term decisions. There's always: the "never lose" position that compounds all gains. When one is losing; even temporarily; the loss is also compounding. It's also keeping the portion that's losing from doing its job of compounding were it invested in a stable position. It's a double edged butter knife.

Sy