Author Topic: Anyone else notice REITs going nutso?  (Read 1449 times)

MickeyMoustache

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Anyone else notice REITs going nutso?
« on: March 18, 2016, 01:40:46 PM »
I opened 2 Roth IRAs in February buying VGSLX (admiral) and didn't realize but apparently I bought at the 52 week low completely unintentionally.  I bought it to be a dividend driven holding but I can't help but notice I'm up 10% in... a month.  What the hell is going on?  It's my first REIT fund and I expected it to be mostly flat for the foreseeable future and it's been outperforming my VTSAX handily.

Is something going on in the REIT world that I'm unaware of?!

mrpercentage

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Re: Anyone else notice REITs going nutso?
« Reply #1 on: March 18, 2016, 01:49:15 PM »
People are banking on inflation and they are shooting for heavy dividends. Its defensive. The market in general has rallied hard. I have had to stop buying my REITS for now. Im holding.

I think part of it was the market was overly pessimistic for REITS due to interest rate increases (most are sensitive and suffer when rates go up). They think the Fed has to back off so they are going into REITS and the shorts are covering their positions now with uncertainty surrounding increasing interest rates. Together it makes a hell of a rally.

I am sitting in O and it's up 30%+ and a another I will not mention rallying just as hard.

There has been a rolling bear market and if you a keen enough or lucky enough to jump into some unloved names when the market sacks it-- you can make out like a bandit a few months later. Im not sure how long the trend will last but its there.

MickeyMoustache

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Re: Anyone else notice REITs going nutso?
« Reply #2 on: March 18, 2016, 03:10:07 PM »
I agree for the most part... I think people were looking at interest rates and predicting doom and gloom but just because rates are higher doesn't 100% correlate to return.  Consider how many properties were refinanced under the historically low rates that will pay dividends for years and years.  Not to mention, as rates go up, rent will likely go up to some degree to cover costs in newer properties. 

As for not mentioning funds, I'd prefer to mention them in hopes of others buying into them and driving the price up more :)  But I'm unlikely to buy anything different than what I've got now for the short term.  The REITs were more of a bonus dump that worked out well, timing-wise.