The song (doesn't) remain the same!
Count me in on "not certain about anything anymore" I have been suggesting along the same lines for quite some time now and the reit sector has played right into that thesis as well. Typically (which we've been anything but) reits could/should go up during times of economic growth, yes even in the face of rising rates. We didn't necessarily get that this last time, in fact they sat most of it out. As I have noted to numb nuts now for ever, there is more to it than JUST rates. Seems like we had the perfect storm align for reits and "The Song Remains The Same" didn't happen. Rates went up, yes, but it was the pace of the increase that slammed this sector, combine that with massive debt wall coming due all at once (still looming but at least known and being dealt with) combined with Covid, combined with the office phenomina that transpired and you start to get the picture. Not sure how anyone can sit there and wonder why reits have been so unloved, sentiment like Karma can be a real b - !tch, and it takes a long time sometimes to turn it. Plus, give me a break, reits are not for trading per say, they are for investing in. If you trade a reit once a year and make, you have done well enough.
Now fast forward to present day and where are we. Bullish market, some would argue slowing economy and the prospect of rates getting cut in a lot of countries, including this great one of ours and yes the U.S. will join the party soon thereafter. Personally, I am hopeful the Song Remains The Same gets back on track because if you look back, "traditionally" reits will climb during recession as well as coming out of recession. Now I would throw out a little caveat here, obviously how deep we go can and will impact this. As it appears now, consensus (for what thats worth) would call for a shallow recession, this being the case would/should bode well.
I have noted more that once however to be careful what you wish for with regards to rates. As soon as the cutting cycle begins, so to does the questions about why we are seeing cuts. The "next" great debate just took over at that point and it WILL get choppy.
My belief is we continue this market rally into the election and then likely reality hits everything in the face. That is when there may be some reconning in particular if the market keeps melting higher. I have been adding to some reits here of late and will continue to as opportunities open up. I have also been buying some defensive value as in time my money market will start to loose its lustre and you can't all of a sudden just up and deploy cash in one foul swoop.
I am comfortable but cautious (as always). Unless we get a wholesale change in what has been broadcasted we still have a nice window here.
I too long for the days in which things start to make a little cents again and things start to act and react as one might expect, or is this just too much to ask right now?
Stay good,
DZ