... a "pricing in" of future stock dilutions, within the REIT sector as a whole (deleveraging/paying down of debt over time, etc)...and so, it would appear that (after the pop, off the March lows/was sweet, we're likely seeing the market 'discounting' future, expected, further new issuance dilutions within the sector.
And, I'd expect that as the dilutions occur, and credit gets lined up (for the outer years), we'll perhaps see a 2nd 'pop', as it were - not huge, but basically a rebound after this current pullback (on dilution expectations).
I'm gonna hold the REIT positions I have -I don't try to time the markets...and I certainly don't sell into weakness. I don't think I'm that smart to know how far they'll pull back / discount coming events...
About all I try to do is have a balanced portfolio...so, I can ride out the fluctuations...and collect dividends along the way. (pretty bland, eh?)
Really?...look at the last 10 year average returns for spy and vnq. spy is -2% or so for ten years while VNQ (or its sister mutual fund) is up 5% per year. The difference in those returns is quite substantial. Many asset classes looked similar recently, that doesn't mean they were that way before or will be in the future.
1 year outlook or 20 year outlook, you are right. I'm a trend or channel trader with a 1 day to 1 week to 2 week outlook. One sector is up while another is down. Oil may be up while airlines are down. Gold may be up while something else is down, so I shift my money in here and out there. One sector is at the top of its channel while another is near the bottom. There is always some place to put your money. The big boys rotate their money from hot sectors to defensive sectors and back again. If you can figure it out and follow them and make a percent a day, you'll do well. I'm playing VNQ here due to the dollar. On a short term basis week by week it diverges quite a bit from the S&P.
I do try to time the markets. No one can hit a bottom or a top perfectly, but you can try to layer into the bottom of a channel and sell into the top of a channel and put the odds in your favor. I bought VNQ today and will buy more, possibly, if it drops some more. Here is why:
1. Recommendations from the experts. The dollar is weak and the gov't is printing tons of money. REITs are one recommendation for a weak dollar, because inflation is sure to come due to all the money being printed and the mounting debt. Rents will go up.
VNQ has been bouncing off the 50% line on the RSI index pretty consistently since around April 10th and it just arrived there again today. On the price chart it has approximately hit the bottom of the channel if you draw a line from the lows on April 11, May 17, 26 and today. Close anyway. It is better to let it hit bottom and start coming up and miss the first few percent, but I've started my position now, possibly too soon, and will add to it if we go up from here. We'll see tomorrow, and Monday, etc.