{"id":10208,"date":"2022-09-22T11:36:02","date_gmt":"2022-09-22T11:36:02","guid":{"rendered":"https:\/\/loans.tiida-nissan.ru\/?p=10208"},"modified":"2022-12-08T18:40:03","modified_gmt":"2022-12-08T18:40:03","slug":"reits-still-a-profitable-investment","status":"publish","type":"post","link":"https:\/\/loans.tiida-nissan.ru\/reits-still-a-profitable-investment.html","title":{"rendered":"REITs: Still a profitable investment?"},"content":{"rendered":"
\"REITs:<\/div>\n

In a version of the Periodic Chart of Investment Returns compiled by JP Morgan Asset Management for 2000-2015, real estate investment trusts (REITs) were the best performing asset class in eight of those sixteen years. During this period, REITs, as represented by the NAREIT Equity REIT Index, achieved an average annual return of 12.9 percent. The next best-performing asset class over the same period was high-yield bonds, with an average annual return of 8.6%.<\/p>\n

As the disclaimer says, past performance is no guarantee of future returns. In the current environment, are REITs still investable investments for retail investors as well as financial advisors and their clients? (For comparison, see: REIT ETFs offer stability. )<\/p>\n

Interest Rates + REITS<\/h2>\n

According to Morningstar (MORN MORNMorgenstern Inc87. 23 + 0. 14% The Vanguard REIT Index Adm (VGSLX), which tracks the MSCI U.S. REIT Index, has highstock 4. 2. 6 a current yield of just over 4% on. In today's low interest rate environment, this is certainly attractive to many investors. Rising interest rates are generally a negative factor for REITs and their outflows increase due to higher interest payments, which reduce the cash available for dividend payments to investors.<\/p>\n

REITs with excess debt or those that need to refinance properties in the near future are more vulnerable to an interest rate hike than others.<\/p>\n

Share Price of Vanguard REIT ETF (VNQ VNQVanguard REIT83. 69 + 0. 72% Created with Highstock 4. 2. 6 ) is down more than 12% from its January high of 2015 due to uncertainty about the future of the Fed's timing and readiness to raise interest rates. Uncertainty over the interest rate hike in late 2015 also weighed on the stock price last year.<\/p>\n

REITs' past performance<\/h2>\n

Cohen & Steers, an investment manager that offers a range of REIT funds, cites the Fed's last cycle of interest rate hikes between June 2004 and June 2006 as an example of this, Interest rates initially hurt REIT performance. Over time, however, the strong economy helped boost returns for REITs. (For more information, see: 3 REITs that are best for retirement in 2016. )<\/p>\n

The cumulative return for REITs over this period was 57.9%, compared to 15.5%. Stocks and 5.9% for bonds, according to the company's.<\/p>\n

The firm says in an article on its website: "When the economy improves and fundamentals are strong, earnings-driven corrections offer historically attractive buying opportunities for long-term investors. As the benefits of stronger economic growth become more apparent, valuations tend to normalize.We believe investors who are focused on taking advantage of these opportunities can be rewarded over the long term. "<\/p>\n

REITs offer diversification factors<\/h2>\n

REITs are not a great diversifier from equities, as evidenced by a correlation of about 78% to equities based on a comparison of the S & P 500 Index and the NAREIT Equity REIT Index over the past decade. Late 2015. However, REITs offer good diversification in terms of low or negative correlations to core bonds, commodities, and currencies.<\/p>\n

Beyond interest rates, the performance of REITs depends on how the economy and stock market perform. In a recent CNBC article, Joseph Smith, chief investment officer of CBRE Clarion Securities, which manages about $22 billion in real estate assets, said, "All year long, a flip-flop has happened between expectations for economic growth and interest rates. This uncertainty creates volatility, and in times of volatility, the correlation of REITs with the broader equity market increases. " The quote from Mr. Smith was given at the end of 2015. <\/p>\n

Factors affecting individual REITs<\/h2>\n

Like any mutual fund or ETF, there are underlying REITs in those funds. Individual REITs can include a base portfolio of commercial properties, residential properties, and hotels or resorts, among others. In addition, there is exposure to certain sectors such as healthcare and specialty sectors such as timber and mortgage REITs.<\/p>\n

The point here is that part of the performance of these REITs is tied to the performance of the equity markets and the sectors of the economy with which they are associated. This means that the performance of these REITs outperforms the overall market and\/or economy. This is no different than the real estate saga, which points to how all real estate is local.<\/p>\n

Individual REITs are also influenced by the people who manage them. As with any other equity or similar instrument, management is important. What is their experience? Are they shareholder centric? Have their own money invested alongside yours?<\/p>\n

The Bottom Line<\/h2>\n

Like many other investments today, REITs can be affected by interest rate increases, at least initially. REITs that take a big hit and those that have to refinance debt while interest rates rise may be more vulnerable than others. Those looking at individual REITs need to look at the company's management and its underlying investment portfolio. There are a number of mutual funds and ETFs that also provide a solid presence in this area. Over time, REITs have become an integral part of many portfolios and could continue to do so. (For related reading, see: 5 types of REITs and how to invest in them. )<\/p>\n","protected":false},"excerpt":{"rendered":"

In a version of the Periodic Chart of Investment Returns compiled by JP Morgan Asset Management for 2000-2015, real estate<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nREITs: Still a profitable investment? - loans.tiida-nissan.ru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/loans.tiida-nissan.ru\/reits-still-a-profitable-investment.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"REITs: Still a profitable investment? - loans.tiida-nissan.ru\" \/>\n<meta property=\"og:description\" content=\"In a version of the Periodic Chart of Investment Returns compiled by JP Morgan Asset Management for 2000-2015, real estate\" \/>\n<meta property=\"og:url\" content=\"https:\/\/loans.tiida-nissan.ru\/reits-still-a-profitable-investment.html\" \/>\n<meta property=\"og:site_name\" content=\"loans.tiida-nissan.ru\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-22T11:36:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T18:40:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/loans.tiida-nissan.ru\/wp-content\/uploads\/sites\/664\/2022\/12\/reits-noch-eine-f7da5a.jpg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/loans.tiida-nissan.ru\/reits-still-a-profitable-investment.html\",\"url\":\"https:\/\/loans.tiida-nissan.ru\/reits-still-a-profitable-investment.html\",\"name\":\"REITs: Still a profitable investment? 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