With a stock like this you would want one of 2 things.1) for it to go on a tear like it has over the last year, or 2)Instead of going sideways you would rather have it drop $3-$5 and stay there for 6-12 months (provided you have at least 80 shares, your dividends are putting in overtime....And when the price makes that cyclical rebound you'll have added nicely to your share total, which accelerates the compounding effect).
Yeah, but walking away from the yield and paying the capital gain tax guarantees another kind of loss; where staying in, who knows -- maybe it doesn't go down for years or goes higher.. The demographics for apartments is very compelling over the coming decade. Depends on your time horizon, I guess.
Have you found a good place to roll the money, in case you do decide to take profits?
I don't see a bubble, though REITs are getting fully priced. People have finally caught on to REITs as a distinct class of securities, and one that provides the usual benefits of real estate ownership without the headaches. And, an essential way to diversify holdings in IRAs, etc. REITs generally went up when regular stocks were dropping over the past few years, which did not go unnoticed by the formerly uninitiated. The money that has flowed into them is not likely to go away and will continue to grow. That should keep us in good shape for a long time, unless/until interest rates jump a few points.
Wacky isn't it! I'd guess a lot of this market cap gain is due to excitement surrounding realestate investments. One hears a lot about realestate being a "safe" investment from friends and relatives these days, but a good majority of us were here long before that was the norm. Maybe we were just lucky (or clever).
As Zebra can tell you, not all REITs are created equal. He has some interesting things to say about several. Hopefully only nice words about MAA.
Our management here treats us as fellow owners of the business, not renters of stock. We should treat them the same.
The question for me is not how long to hold and then sell MAA (why would I ever want to sell such a wonderful well run business), but rather, where to put my capital until MAA can be bought again at attractive prices relative to business results.
Housing prices are getting pushed up, helping the overall economics of our business once interest rates begin to rise. This would push down home affordability and eventually increase occupancy levels. That would make now a good time to buy properties with our stock, don't you think? Or so I see it...feel free to disagree if I'm missing something here.
Thanks for the reply. I agree that MAA is one of the best managed apartment REITs. And a big congrats is in order for Eric Bolton and his team.
While the stock price has run up considerably, the 6.8% yield is still a good reason to hold. Many other REITs are yielding much less. In fact, some of my shopping center REITs have reached sub 5% yields. Amazing !!!