did some DD on reit's and like the cohen & steers funds. anyone in any of these funds, RFI, RLF, RQI RPF? Only RFI has been around longest since 1993 and trades at slight premium and has lowest yield. I'm interested more in growth of nav and dividends. Any thoughts from those who own any of these?
No way to improve on what you've said here. I think we've all tried to time our entries and exits on occasion, only to be frustrated in the end. At least I know I have.
My level of comfort has increased significantly since I've started holding securities (especially those that pay good dividends) based on fundamentals rather than trying to eek out each last buck by trading based on market knee-jerks.
If I wasn't getting a double digit return from dividends that I believe will not be adversely affected by rate increases I would agree with you. With said dividends in the picture it's not at all clear to me that I am nimble enough to go in and out and beat the performance I'd get by sitting out any firestorms and waiting for the inevitable reversion to mean on value. I do know it would be a lot more time consuming and gut churning to attempt entries and exits based on something other than my judgment of fundamental value.
I think you've got to distinguish between the fundamentals of the enterprise and investor sentiment in the auction market.
That's the problem we're seeing in bonds and rate-related stocks now. For instance, the huge one-step selloff in Municipals this Spring was neither very typical nor very rational; yet it did a very effective job of eliminating about half the capital gains of a long bull market.
This is what the charts actually measure and anticipate to a degree. For whatever reason, the entire rate picture is overshadowed by very considerable fear; and, until one sees some evidence to the contrary, I think you've got to make the assumption that the panic selling will recur.
In fact, it's possible to look at the rate issue as central to the entire currency/equity/commodity/debt universe of tradable securities now--as John Murphy does in his most recent market overview.
It looks to me like the note contract is again approaching an inflection point. When it rolls over, I expect most or all related media to sell again. Whether that will present another buying opportunity as good as the panic bottom of May remains to be seen.
But I see no good reason to maintain a buy-and-hold investment posture in a market whose 2000-2003 bull trend has clearly failed and which has yet to produce one sign of improvement on the primary trend level.
Those for whom capital protection is not a major issue would logically feel differently.
Arguably for MBS REITs, prepayment risk is the equal of the rising interest rate risk. Since the former vaporizes in a rising rate environment, it allows them to milk their existing portfolios as cash cows indefinitely(sorry about that metaphor!). Only if your income is tied primarily to originations are you in trouble.
I own some REIT funds, including RQI and RPF. Also own RTU, which leans more towards utilities.
All are interest rate sensitive and are leveraged which increases rate sensitivity. Like many others, I took a hit in April when the Fed first talked seriously about rate increases. I'm back to about even now. And for those who reinvest dividends, the discount to NAV means getting a little "kick" in value.
Obviously, the monthly payouts and relatively large distributions are the attraction.
I believe the risks--I think they are about average--and large distributions make RPF, RQI, and RTU attractive for retirement accounts and for those desiring income. I'm retired and need an income stream.
I've done well in REIT and bond CEFs over the years, especially during the dot.com meltdown. Their method of returning value to their securities holders make more sense to me than the "growth" stocks which are sensitive to competition--domestic and international, an ever-changing economic climate, the whims of the consuming public, questionable accounting and management ethics, and an ever-present need to hype their companies, especially in terms of revenue and profit.
Just my opinion.