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I have a heavy exposure in REITs (my only non-index fund investment). I treat these as passive investments so I had to look to see what I was actually invested
by dhosek 6y ago
I have a heavy exposure in REITs (my only non-index fund investment). I treat these as passive investments so I had to look to see what I was actually invested in. I have no commercial exposure, but even what I have has been hit hard by COVID. AVB (residential), PEAK (life science/medical office/senior housing) and PSA (Public Storage) are all down roughly 25% YTD. I have to imagine that REITS in retail/office space are going to be doing even worse as these three are sectors that are less likely to see long-lasting contractions.
- dhosek 6y agoSomeone mentioned PREIT (NYSE: PEI) in another comment so I checked to see how they're doing. Down 80% YTD. I'm glad not to be invested in malls and shopping centers.
- joshcain 6y agoPSA being down is interesting. I might have thought there would be greater demand for storage units as people clear stuff out of their houses to make room for home offices/gyms/etc. That said, all the people who've lost jobs or hours are probably not looking to pay $100s/month for an auxiliary junk room.
- dhosek 6y agoOne thing I've learned is that markets are rarely rational. But, with REITs, the real return comes in the form of dividends more than capital appreciation, so if the price has irrationally declined, my return will be greater (I have all of my REIT investments set up with dividend reinvestment). I'm not expecting to liquidate any of these positions any time soon so I can afford to wait for them to do whatever they'll do.
- dredmorbius 6y agoA rush to liquidity can take down even otherwise sound investments. J.K. Galbraith describes this (as a "Gresham's Law" if memory serves) in his book on the 1929 crash. Highly recommended.