U.S. REITS – The Balance of Chaotic Monday

U.S. stock futures surged Tuesday, a sign that stock indexes here are set to stabilize despite another sharp drop in Chinese shares.

Sourced through Scoop.it from: www.wsj.com

1,089 apologies Mr. Warren Buffet. Stocks should be purchased and forgotten about, especially when you are involved with long-term investments such as real estate. However, it has been difficult not to assess the damages, or for some investors discover the opportunities, of this Chaotic Monday. It has been extremely interesting to see the wide variety of reactions throughout the day. From the tragic #BlackMonday Twitter tweet, to one of the most popular articles of the day, Cam Rui’s “Relax, Have a Glass of Wine”, opinions certainly vary.

The truth is the past few days have reminded us, over and over again, that equity Real Estate Investment Trusts, or equity REITs, can be an odd beast. REITs, unlike private real estate holdings, enjoy liquidity. However they are subject to the same fluctuations and market volatility the same as other traded stocks. The MSCI REIT Index (NYSE ^RMZ), a trusted REIT index, plummeted a major five percent this Monday, while the S&P 500 was down by 3.9 percent, and the Dow Jones by 3.6 percent. In addition, the ten-year Treasury yield fell below two percent as investors put their money into more secure investments.

This Monday, REIT stock prices fell from + 0.3 to –8.9 percent, a huge loss. Only one of the 175 stocks we follow traded positively. Not a single sector was spared, and losses happened across the board.

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Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

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