Transcript Tiny Titans Screen - AAII Silicon Valley Chapter

My (Al Z) Approach to REITs: ETFs
• I use US and International REITs as 2 of the 10 asset classes I
allocate my funds across
– Assume non-correlated to other assets (in general true - not so true
since the ‘07 time frame)
– Include are R.E. related items: e.g., home builders, infrastructure
builders, mortgage REITs
• I take a “Core and Explore” approach - limited by REIT selections in
401Ks, etc.
– Core via ETFs, CEFs or MFs; Explore with specific REITs
– Instruments: CSRIX, ITB, RNP, VNQ/IYR, REZ, TAO, RWX, IGF, PXR, REM
– Selection of ETFs in this area is somewhat limited (short histories,
limited liquidity ($1M/day), multiple look-alikes)
• For the core: I time with a 10 month SMA to be in REITS or in
cash/bonds
– If long REITS I choose the top 3-5 ETFs based on near-term gains
(combination of 1, 3, 6 and 12 month gains)
– I also have a “Best REIT ETF” based on Sector Surfer (see next page)
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My (Al Z) Approach to REITs: ETFs
Reasonable
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My (Al Z) Approach to REITs: Stocks
• For the “explore” part of the portfolio I choose 12 US
REITs.
– These 12 REITS are timed via a 10 month SMA on the IYR
• These REITs are chosen by what a friend calls his “Jack
Welch screen”
– Daily trading volume > $1M (liquidity test)
– Take the Top 12 REITs by their revenue (“Buy the Biggest”)
– Rotate/update the 12 REITS once per year (on 12/31/xx) or
whenever the timing signal signals a buy condition
• Following slide shows the performance of IYR, the
timed IYR and the timed 12 REIT portfolio
• I have been running this portfolio for 2+ years at
present getting similar results to the back test.
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My (Al Z) Approach to REITs: Stocks
Key:
Black IYR B&H
Blue IYR Timed
Red 10 12 REITs by Rev Timed
MDD 22%
Calmar: 0.55
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