investment compromise

[crabbypatty]

.......As I have mentioned, DH is hesitant to invest in the stock market. We do, he just doesn't trust it.

At this point, I know I can not balance appropriately so I have moved most of our retirement money into target accounts. Maybe I'll move it later, but not until I am better educated anout the choices.

So...
DH received a small amount of money and has agreed to open a Roth. Those who notice my posts might remember that I am stuck on the idea of getting into index funds as well. DH is very interested in real estate so I was thinking....... REIT index fund?

This would accomplish a few things. #1 By buying a fund in an area DH is interested in, perhaps he will be attentive to it and in the process learn more about investing #2 Satisfy my itch for the aquisition of an index fund. And most importantly, keep the money from being spent on useless stuff.

Thoughts?

[sweeps]

The REIT fund may be an index fund, but it doesn't make you diversified. If this REIT investment represents a small (< 10%) portion of your investments, that's fine, but if it represents a large portion of your investments, you're taking a big gamble.

[crabbypatty]

Originally Posted by sweeps

The REIT fund may be an index fund, but it doesn't make you diversified. If this REIT investment represents a small (< 10%) portion of your investments, that's fine, but if it represents a large portion of your investments, you're taking a big gamble.

Hmm. Perhaps a more conservative index would suit my nature better. The words "big gamble" scare me. Although a simple purchase at 3k would be less than 10% of the total picture, adding to it regularly would bump it up.

[disneysteve]

Originally Posted by crabbypatty

Although a simple purchase at 3k would be less than 10% of the total picture, adding to it regularly would bump it up.

Wouldn't you also be adding to your other investments over time? As long as you keep the REIT portion to 10% or so of the overall portfolio, I see nothing wrong with going this route. Just don't forget to look at the big picture and keep your asset allocation in mind.

[kv968]

Originally Posted by crabbypatty

.......As I have mentioned, DH is hesitant to invest in the stock market. We do, he just doesn't trust it.

So...
DH received a small amount of money and has agreed to open a Roth. Those who notice my posts might remember that I am stuck on the idea of getting into index funds as well. DH is very interested in real estate so I was thinking....... REIT index fund?

This would accomplish a few things. #1 By buying a fund in an area DH is interested in, perhaps he will be attentive to it and in the process learn more about investing #2 Satisfy my itch for the aquisition of an index fund. And most importantly, keep the money from being spent on useless stuff.

Thoughts?

Although holding a smaller percentage (~10%) of a portfolio in a REIT would be a good idea, since your DH is hesitant to invest and doesn't trust the stock market, I don't think a REIT would be the best way for him to get exposed to it. REIT's can be quite erratic (especially recently) and such volatility may turn him off to the stock market all the more. He may be interested in the area of real estate, and being interested in what you're investing in is great, but I would worry that the volatility of the sector would do more harm than good. However if he understands that not all investments are quite that volatile then I'd say go for it.