# Reit



## daddybigbucks (Jan 30, 2011)

I havent seen a REIT post lately.

I currently do not have any REIT but i liked the idea that someone said on here. "Instead of buying real estate to rent out, buy REIT instead."

I was wondering if i can get everyone's 3 all-time Favorite REIT.
I am not looking for the best bargain REIT right now, I am looking to invest long term and dont mind paying a premium for winners.

any input is greatly appreciated.


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## dagman1 (Mar 3, 2010)

I've thought about REITs because of the high-yields, but I am hesitant after doing some reading about them.

Specifically, from what I've read, I would be worried about how some of them have taken advantage from rising Canadian real-estate prices to maintain their high yield by refinancing their properties and distributing the cash.

If you believe real-estate is due for at least a moderate correction, that could put a lot of these REITs with negative equity, destroying the dividend (and the stock price). So if I was to buy in this space I would be cautious to say the least.


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## fatcat (Nov 11, 2009)

do a search, lot's of good threads on reit's


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## andrewf (Mar 1, 2010)

The great thing about REITs is that in a correction, they are way more liquid than individual properties.


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## larry81 (Nov 22, 2010)

http://www.etfs.bmo.com/bmo-etfs/glance?fundId=80001
http://ca.ishares.com/product_info/fund/overview/XRE.htm

pick one


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## gibor365 (Apr 1, 2011)

imho , the best are ETFs - XRE and ZRE


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## Cal (Jun 17, 2009)

There are several types of reits....apartment, commercial RE, health care....if you want to specify one area, that would help.

You will get alot of etf recommendations on this site. I would look at the specific holdings of the etfs mentioned to learn more about the various REIT companies.


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## daddybigbucks (Jan 30, 2011)

thanks for the responses, I guess my question was a bit general.

I just have a different way of investing when i go into a new sector.
I dont mind buying 3 companies right off, then i watch and learn as time goes on and re-adjust as needed. Sometimes i sell for a loss, but then i learned something that i wont forget.

I dont like etf's, because it just goes with the general market, I prefer to buy into companies and watch to see how they run their business and i can usually find a pattern to buy, sell or hold.


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## kcowan (Jul 1, 2010)

Cal said:


> There are several types of reits....apartment, commercial RE, health care....if you want to specify one area, that would help.
> ...


And strip malls versus office buildings, et al. Each of these subsectors will perform differently.


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## KaeJS (Sep 28, 2010)

Just to throw out what I'm holding, I only have 100 RioCan at $24.80

I also don't like ETFs.

Riocan recently came down a lot in price. It was over $26 last week. And before the crisis, it was over $27.

Which means, from my view, getting in at $25.50 for example, would definitely provide gains in the longer term.

Unless of course you think real estate is going to collapse, but it looks like you dont.

Riocan also maintained their dividend payments during the crisis and are said to increase dividends in 2012 as per this article:

http://www.reuters.com/article/2011/05/19/riocan-idUSL4E7GJ26E20110519


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## Sherlock (Apr 18, 2010)

andrewf said:


> The great thing about REITs is that in a correction, they are way more liquid than individual properties.


If a significant number of people all sold their shares at the same time (as would possibly happen in case of a really big correction), would the reit be able to give them all their money back?


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## andrewf (Mar 1, 2010)

It's not necessarily the REIT itself that would be the buyer. The stock market is a secondary market where third parties can buy ownership stakes. So the buyer would be someone who thought that this was a good time to buy as prices soften, etc. Usuaully these things are a game of who is the greater fool.


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## HaroldCrump (Jun 10, 2009)

I also notice that in a market correction (such as today), the REITs tend to move up, possibly because of investors looking for stable yields.
Of course, in a historical downturn such as 2008 - 2009 there's nowhere to run or hide.
But on days like these with 100+ pts. of downturn, the REITs provide some cushion & stability.

That said, one of the issues with REITs is constant dilution.
One of many issues, that is


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## gibor365 (Apr 1, 2011)

HaroldCrump said:


> I also notice that in a market correction (such as today), the REITs tend to move up, possibly because of investors looking for stable yields.
> Of course, in a historical downturn such as 2008 - 2009 there's nowhere to run or hide.
> But on days like these with 100+ pts. of downturn, the REITs provide some cushion & stability.
> 
> ...


In some cases yes, but not on days like today. Both ZRE and XRE are down more than 0.8%.

Today is a disaster. After AAPL changed to red, the only 2 stocks in my portfolio that are a little bit up so far are PALL and PMZ


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## HaroldCrump (Jun 10, 2009)

gibor said:


> In some cases yes, but not on days like today. Both ZRE and XRE are down more than 0.8%.


Darn ETFs!
Probably because one or more of the mega cap REIT must be down.
Most of the REITs I hold or watch seem to be up 
Also, -0.80% doesn't sound too bad given that the TSX is down nearly -1.50%, so the REITs are performing nearly twice as well as the index.


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## gibor365 (Apr 1, 2011)

There is no mega cap on ZRE , all equal weight...


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## andrewf (Mar 1, 2010)

REITs are nice for the stable cash flow from distributions. If you held through 2008, you still have a very nice 5 year return. If you managed to time the market, you would have done even better. A simple timing system would have had you exit XRE in July/August 2007 and waited until June 2009 to re-enter, saving you a 42% drop in value, and an even larger draw-down.


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## ChrisR (Jul 13, 2009)

andrewf said:


> REITs are nice for the stable cash flow from distributions. If you held through 2008, you still have a very nice 5 year return. If you managed to time the market, you would have done even better. A simple timing system would have had you exit XRE in July/August 2007 and waited until June 2009 to re-enter, saving you a 42% drop in value, and an even larger draw-down.


"Simple" timing system? Like seeing the future in a crystal ball kind of simple?

Edit: And by the way, since I'm pretty interested in REITs myself right now... what does your crystal ball say about the next 3 years?


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## gibor365 (Apr 1, 2011)

ChrisR said:


> "Simple" timing system? Like seeing the future in a crystal ball kind of simple?


I was also curious to know about any "timing system" 
Except "system' telling - sell on 10% or 15% or so on loss, i don't know any other system.

I'm still holding major portion of my REITs, IMHO it's gonna e OK for long term... I hold both ZRE and XRE, bought last week PMZ.UN, sold today CUF.UN with little profit


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## andrewf (Mar 1, 2010)

One simple timing system is to sell when the price falls below the 200 day simple moving average. This approach may not necessarily improve returns over the long haul, but it can reduce risk (measured in terms of volatility, maximum draw-down).


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## andrewf (Mar 1, 2010)

Chris: I have no crystal ball. I'm holding REITs until the market tells me it's a bad idea. I trim my gains when the value of my position runs too far ahead of my target allocation. US Real estate has been very good to me in the past year. Canadian REITs have been decent as well. I hold both.


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## gibor365 (Apr 1, 2011)

andrewf said:


> One simple timing system is to sell when the price falls below the 200 day simple moving average. This approach may not necessarily improve returns over the long haul, but it can reduce risk (measured in terms of volatility, maximum draw-down).


Again....falls for how long and for what % below?!
Some stocks rebounding when touching 200 SMA, some sinking even more....


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## gibor365 (Apr 1, 2011)

andrewf said:


> US Real estate has been very good to me in the past year.


By US Real Estate do you mean something like NLY, AGNC or not?


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## HaroldCrump (Jun 10, 2009)

Dundee's first international REIT began trading for the first time today, since its IPO back in June.
As far as I know, this is one of the very few true international (i.e. non North American) REITs publicly traded (Brookfield Properties being the other large, well-known name).
For now, it is focused entirely on Germany but have long term plans for other large West European countries like the UK & France.
IPO was @ $10 a pop, now trading at $10.17.
Yield is expected to be around 8% to begin with.

More info at:
http://www.dundeeinternational.com/


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## andrewf (Mar 1, 2010)

Sorry, missed those last two questions, gibor.

One system might be to sell if at the end of the month, the price is below the 200 day SMA. Waiting for the end of the month helps to address the problem of too many round-trip trades. Yes, the security might rebound after you sell it. It's the risk you take, and the tradeoff for not holding something as it grinds to a 50% loss over 4 or 5 months.

By US real estate, I mean RWR. I would not invest in just one or two of those mortgage REITs. They are highly levered, and I don't have a lot of faith that they won't blow up. They were spinning off suspiciously large amounts of cash.

For what it's worth. RWR is just about at the 200 day SMA. I have a feeling I might have to do some selling soon.


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## Banalanal (Mar 28, 2011)

Going to link this to get more analyses http://canadianmoneyforum.com/showthread.php?p=80588&posted=1#post80588


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## larry81 (Nov 22, 2010)

I personally purchased more XRE in my TFSA last week, on the dip 

I like my REIT !!!


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