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Vanguard Real Estate Index Fund ETF Shares

Real estate is no less volatile than the stock market, even when bundled up in a real estate investment trust (or REIT). Indeed, in certain situations it can be even more volatile than stocks. It’s still a means of offsetting stock market sell-offs or individual stock corrections, however, as it doesn’t necessarily move in perfect tandem with the stock market.

This isn’t always obvious, particularly in the short term. The Vanguard Real Estate Index Fund ETF Shares (NYSEMKT:VNQ) has actually lost more ground than the S&P 500 since early January, now sitting 11% below its recent peak. As the graphic below shows us, though, there have been several longer-term stretches during the past ten years when Vanguard Real Estate Index Fund ETF Shares have moved higher while the stock market was moving lower, and vice versa.

Sure, both investments have moved higher during the decade in question, but the stock-based index logged considerably better gains. We’re only trying to take the edge off the market volatility that ends up rattling investors’ psyches, though. A position in the Vanguard Real Estate Index Fund ETF still accomplishes that more often than not. And owners are collecting a dividend of 2.2% in the meantime.

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