A.I.M. Users Bulletin Board

[OldAIMGuy]

Welcome Back UT, Re: REITs and your timing.....

I've been watching my REITs and REIT ETFs decline for about 2 months now. So far it's been a slide that hasn't generated any buys, more like the slide in 2015 - 2016.

Currently my VNQ position is at ~7% above its 52 Week Low, NRO is at around 20% above its low and WPC is at ~47% of its low. VNQ is coming into range for my AIM, but the other two are still a distance off.

Yields at current prices range from around 4% to around 6% it appears. There are some with higher yields such as NRO with an 8.5% yield. Yields are attractive here and the selling probably has to do with the change in direction of the FED. What's interesting is most of the increase in Treasury coupon yields has occurred at the Short end of durations.

Debt Paper              Current Yield        Yield 1 year ago 
 13 Week Treasury         1.455%/Yr             0.518%/Yr 
 26 Week Treasury         1.610%                0.600% 
 5 Year Treasury          2.270%                1.890% 
 10 Year Treasury         2.460%                2.380% 
 20 Year Treasury         2.630%                2.750%

So, it's a bit of a log jam at the longer end with very little change in the last 12 months.

Eventually the longer duration end of the interest rate scale will start to rise, but in the mean time it would appear the sell off in REITs is a bit over-done. REITs generally have far better yields (with good predictability) than government treasuries so shouldn't be under interest rate pressure here.

However, I've not looked into the ramifications of the new tax law and whether they have any effect on REITs. Anyone else taken a look at this area?