Are REITs “bond surrogates”?
################################################################################ No. REITs do provide substantial dividend yields (often near that of investment-rated corporate bonds). However, REIT prices are subject to many different factors besides interest rates, and may move counter to bond prices at any particular time. A couple of good posts on the topic are: http://boards.fool.com/Message.asp?mid=18600136 http://boards.fool.com/Message.asp?mid=19510421&sort=whole#1… Also, consider that REITs are stocks, and should be treated as such in an asset allocation plan. For example, during those rare but extreme market shocks, REITs are far more likely to head down with other stocks, while bonds (especially government bonds) are more likely to go up (in the ensuing “flight-to-quality”).
