CRS Looks at REITS as TSP Investment

The Congressional Research Service has issued a report examining real estate investment trusts and the proposal to include a fund tracking them as a TSP investment option, saying that while REITs have performed well compared with other stocks in recent years, REIT stocks “may be overvalued and due for a correction.” It said that “what the creation of a REIT fund would do is allow TSP participants to increase the proportion of REIT stocks in their portfolios beyond their weighting in broad indices such as the S&P 500. If their timing were right, TSP participants who chose the REIT option could outperform their peers who remained in the stock funds. But . . . they would be choosing a volatile investment option that could lead to losses as well as gains.”