REITs Are In Trouble
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Thread: REITs Are In Trouble

  1. #1
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    REITs Are In Trouble

    Canada housing bubble, oil, higher interest rates and the recent Home Capital problems are causing REITs to drop. They have rolled over and could go far lower. However they could be an opportunity going forward as pension funds are hungry for alternative investments such as REITs.

    https://www.bloomberg.com/news/artic...property-reits


  2. #2
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    IMO, much naiviety in that article. It's like saying Industrials getting hurt will also affect Consumer Staples. The REIT sector is as diverse as the broader stock market. Residential REITs may well be hurt if house prices decline enough to drive tenants out of apartments, but tell me how HCG's woes really affect Pure Industrial REIT's warehouse contracts with FedEx?

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    Speaking of REITs--I don't buy the REIT ETFs because the fees are too high. Instead I buy them individually focusing on high, sustainable yields. I wouldn't mind trimming my collection by a name or two but still want to remain diversified. Thoughts? I currently have these in equal-ish slices:

    REI.UN
    HR.UN
    AX.UN
    D.UN
    BEI.UN
    MRT.UN

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  5. #4
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    I am with AltaRed on this one. Don't really buy the argument.

    GalacticPineapple, thanks for sharing your REIT basket. I also run my own ETF of REITs composed of 6 individual ones in equal-ish weights. I had a topic recently sharing a comparison with ZRE. It's available at http://canadianmoneyforum.com/showth...m-ETF-analysis if you're interested.

    I am not entirely certain how accurate the chart is but here's what yours ETF looks like compared to ZRE https://www.tradingview.com/x/L8ULZG2U/

    Cheers,
    JC

  6. #5
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    Thanks from me as well for sharing your basket Galactic, some good thoughts here. I am interested in adding a REIT later if prices keep dropping.

    AltaRed if something changes sentiment then they all go down but that also creates opportunity.
    Last edited by new dog; 2017-05-18 at 03:49 PM.

  7. #6
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    Quote Originally Posted by john.cray View Post
    I am not entirely certain how accurate the chart is but here's what yours ETF looks like compared to ZRE https://www.tradingview.com/x/L8ULZG2U/

    Cheers,
    JC
    I will pop over to your thread. Very interesting. Looks like I got lucky with timing.

  8. #7
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    Quote Originally Posted by new dog View Post
    AltaRed if something changes sentiment then they all go down but that also creates opportunity.
    True, market sentiment can affect the whole sector...just like the rest of the index.

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    how HCG's woes really affect Pure Industrial REIT's warehouse contracts with FedEx?
    or DRG.UN with real estate in Germany/Austria or SRT.UN with anchor states in US ?!

  10. #9
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    Quote Originally Posted by AltaRed View Post
    IMO, much naiviety in that article. It's like saying Industrials getting hurt will also affect Consumer Staples. The REIT sector is as diverse as the broader stock market. Residential REITs may well be hurt if house prices decline enough to drive tenants out of apartments, but tell me how HCG's woes really affect Pure Industrial REIT's warehouse contracts with FedEx?
    True, but the performance of different REITs will still be positively correlated. Like most will underperform if there is a threat of interest rate rises due to Canadian banks' ratings being lowered.

  11. #10
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    Positively correlated, but to differing degrees.....and then I can agree with you.


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