What a wild day in the markets! I honestly wasn't expecting this much green. Did you guys see Sandisk shoot up 13% today? They announced they are returning extra profits to shareholders as dividends, and the market absolutely loved it. The whole AI semi sector and the Nasdaq just rallied hard.
It makes a lot of sense though. Both the CPI and PPI came in way lower than expected. Core CPI dropped to 2.5%, which basically means the Fed has zero excuses to raise rates at the September FOMC.
This got me thinking a lot about my 30-year pension portfolio and how to handle the cash flow. Right now, I’m pretty heavy in SGOV, pulling in a nice 3.8% interest just holding ultra-short-term US treasuries. It’s stress-free, but let's be real—these rates aren't going to last forever.
When rates inevitably drop below 2%, I’m planning to start accumulating US REIT ETFs, maybe aiming for about 5% of my total portfolio. I’ve been comparing a few:
Realty Income (O) gives a really sweet 5%+ yield and pays monthly, which is awesome for cash flow, but the stock price can be super volatile.
Then there is VNQ, yielding around 3.5%. It's way more stable because it holds a massive, diversified basket of US real estate.
And XLRE is great too, run by State Street, focusing mostly on large-cap S&P 500 real estate companies.
