is it a good time to buy REITs right now?

[kindheartedguy]

is it a good time to buy REITs right now?

most of them are at their alltime highs.............

[PrinceMS]

You asking a general deal-searching public to perdict future? or most-likely outcome for future of Real Estate?

There is a 900 page and 100 page thread on perdiction of real estate (in Canada).

Bottom line: No one knows. Too many variables, will europe break? will china have a "soft landnig"? Can India debt / inflation is too much? Is mortgage CMHC risking too much? is personal debt too much in Canada? ... there are probably 1000 other things that may effect Real Estate in Canada.

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What you want to do is - Can you take risk with REIT? What if they loose 10? 30? 50%? in value. What will your action be.

Search COUCH POTATO theory. Implement that - you be set for life.

[rfdrfd]

yes it is. You are a little late, but not too late. I suggest RioCan (REI.un) or REF.un doing amazingly well and with dividends too. I have REI.UN for a few months now

[S5]

is it a good time to buy REITs right now?

most of them are at their alltime highs.............

You already answered your own question. Hard to think of a worse time to invest in REITs than right now.

[Stryker]

Not predicting anything, but if we do eventually get high inflation, REIT's "may" look like a good investment (http://www.canadianbusiness.com/blog/investing/89296--real-estate-as-an-inflation-hedge) going forward. My own allocation to REIT's is only 5% of an RRSP.

[ccyk]

i'd rather buy oil majors, oil at high price, while oil companies trade like oil were $20 lower
cvx p/e8.10 yield 3.34
cop 6.33 4.65

[Jungle]

+1 I don't see any value in reit right now. There has been a flight to yield by investors because of the underperforming markets. Same can be said for a few other dividend or yield gems.

I think the time to by reit or Riocan was a couple of years ago.

Also reit are different then company stock so the valuation methods are a different.

[Stryker]

If you're willing to put more money into a REIT if it goes down, then by all means, buy into it. The same for any asset class. Once you've set up your target portfolio allocations, learn not to do any market forecasting. (http://www.cbsnews.com/8301-505123_162-37843020/the-accuracy-of-experts-forecasts/)

[ilfsoy]

Does it make sense with your portfolio? Is my crystal ball shinier than yours? Lol.

IMO no. The simple reason is as you said near or at all time highs which means more likely to correct than continue a straight line higher. Also the real estate market is weak in many parts of the country (certainly not all) which is not good for REITs. Thirdly, investors are chasing yields and inflating prices beyond fundamentals which of course ties back to point one.

However, looking at other segments of the markets you will be hard pressed to find one that is a good investment right now so owning something that pays you to own it (REIT) is better than the alternative.

[Terrific_Deals2k8]

Agriculture and materials, done. You don't want REITs b/c they are PRICE TAKERS. Most of them cannot increase rent substantially more than inflation. Plus, with the Canadian housing market fluctuations, there might be a lot of people waiting on the sidelines (like myself) who have money saved up but waiting for the prices to decline a bit more before becoming a home owner. I think the days of high rental occupancy/utilization will drop in the next couple of years.

[Terrific_Deals2k8]

Recommendations include: MOS/AGU, ORCL, BTU/TCK.B, TEVA, VLO, and RES. In an inflationary market, you want to own stocks that ARE NOT price takers (i.e. entities that have price setting power and low demand elasticity). Short stocks like GG, K, YRI, ABX, AEM, EGO, and overvalued internet stocks w/ low or negative earnings (ZNGA, GRPN, P)

[FiNaL WaR]

zre.to has new all time high today too.

damn was looking to buy some

[SkimGuy]

zre.to has new all time high today too.

damn was looking to buy some

lol I bought it last month at 25.58 :D

[Stryker]

If you're concerned about REIT ETF's being too expensive right now, you can diversify away your risk in this asset class, by doing something simple like buying the iShares XIC - S&P/TSX Capped Composite Index Fund. (http://ca.ishares.com/product_info/fund/holdings/XIC.htm) I just checked and almost, but not quite 3% of that ETF contains Canadian REIT's.

[ilfsoy]

If you're concerned about REIT ETF's being too expensive right now, you can diversify away your risk in this asset class, by doing something simple like buying the iShares XIC - S&P/TSX Capped Composite Index Fund. (http://ca.ishares.com/product_info/fund/holdings/XIC.htm) I just checked and almost, but not quite 3% of that ETF contains Canadian REIT's.

3%? What's the point... and then he'd have to worry about his what 50% exposure to materials and energy.

[Stryker]

3%? What's the point... and then he'd have to worry about his what 50% exposure to materials and energy.

Well, the OP asked a question where he's looking for a definitive "yes" or "no" answer. Unfortunately, there is no easy answer one way or the other. Where there is no consensus on predictions as to whether now is a good time to buy a certain asset class or sector, the OP may find it more profitable for the long run in his investments to get out of the guessing game forever. Then the OP can say, I don't know and I don't care, because his index owns them.

As per the real estate sector in XIC, Morningstar (http://portfolios.morningstar.com/fund/summary?t=XIC&region=CAN&culture=en_us&ops=&cur=USD&productcode=) gives it an allocation of just over 4%. Adding the materials and energy sectors at the iShares site, (http://ca.ishares.com/product_info/fund/overview/XIC.htm) I get a total allocation of 44%, plus let's not forget the financial sector at near 32%. The allocations to the various sectors in this index keep changing over the years. I can still remember back in 2000 when it was quite tech heavy. Of course, in the early part of that year a lot of people were asking if it was still a good time to get into technology stocks, another hot sector. Most of the experts were of course answering with an emphatic yes.

For an investment vehicle with a lot warts and imperfections, you would think at least the hard working, extremely intelligent professionals would be able to find a way to circumvent it, but instead it's the majority of the pros that keep getting clobbered by the TSX composite over the long run.

[rfdrfd]

REF.UN made another 52 week high today, while markets are down